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EXHIBIT 99.2
CENTURA BANKS, INC.
AND
TRIANGLE BANCORP, INC.
LEVERAGING THE STRATEGY - IN MARKET
INVESTOR PRESENTATION
AUGUST 23, 1999
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CAUTIONARY STATEMENT
- - A number of statements we will be making in our presentation and in the
accompanying slides will be "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, such as statements
of the Corporation's plans, goals, objectives, expectations, projections,
estimates, and intentions. These forward-looking statements involve
significant risks and uncertainties and are subject to change based on
various factors (some of which are beyond the Corporation's control).
Factors that might cause such a difference include, but are not limited to:
(i) expected cost savings from the merger may not be fully realized or
realized within the expected time frame; (ii) revenues following the merger
may be lower than expected, or deposit attrition, operating costs or
customer loss and business disruption following the merger may be greater
than expected; (iii) competitive pressures among depository and other
financial institutions may increase significantly; (iv) costs or
difficulties related to the integration of the business of Centura and
Triangle may be greater than expected; (v) changes in the interest rate
environment may reduce margins; (vi) general economic or business
conditions, either nationally or in the states or regions in which Centura
does business, may be less favorable than expected, resulting in, among
other things, a deterioration in credit quality or a reduced demand for
credit; (vii) legislative or regulatory changes may adversely affect the
businesses in which Centura is engaged; and (viii) changes may occur in the
securities markets. Additional information with respect to factors that may
cause actual results to differ materially from those contemplated by such
forward-looking statements is included in Centura's current and subsequent
filings with the Securities and Exchange Commission.
- - In addition to the foregoing, a significant portion of the financial
information presented has not been prepared based on GAAP and is derived
from internal management reporting sources.
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TRANSACTION OBJECTIVE
TO PRODUCE SUPERIOR FINANCIAL RETURNS BY INCREASING SHARE IN MARKETS WHERE
CENTURA HAS A PROVEN ABILITY TO MEET THE DIVERSE FINANCIAL NEEDS OF OUR
CUSTOMERS.
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COMPANY OVERVIEWS
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CENTURA BANKS, INC.
[BRANCH MAP]
- - $8.8 billion in assets
- - $6.0 billion in deposits
- - 227 Branches
- - 185 traditional 42 in-store
- - 3 Regional Insurance Offices
- - 240 ATMs
- - 36 Series 7 Brokers
KEY CITIES (# OF BRANCHES)
RALEIGH/DURHAM (15)
HAMPTON ROADS (25)
GREENSBORO (5)
ROCKY MOUNT (9)
GREENVILLE (3)
WINSTON-SALEM (5)
FAYETTEVILLE (8)
WILMINGTON (7)
CHARLOTTE (10)
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TRIANGLE BANCORP, INC.
[BRANCH MAP]
KEY CITIES (# OF BRANCHES)
RALEIGH/DURHAM (11)
ROCKY MOUNT (4)
GREENVILLE (3)
GOLDSBORO (3)
FAYETTEVILLE (2)
WILMINGTON (1)
CHARLOTTE (3)
- - $2.3 billion in assets
- - $1.8 billion in deposits
- - 71 Branches
- - 65 traditional 6 in-store
- - 51 ATMs
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NORTH CAROLINA MARKET CHARACTERISTICS
- - Unemployment rate - 2.7% (seasonally adjusted June 1999)
- - 11th most populated state and projected to remain so thru 2025
- - 1997-1998- 5th largest population gain of any state
- - 7.2 million population - expected to add 2.2 million in next 30 years
- - Predicted to have 7th largest net population gain in the next three decades
- - Highly diversified economy
- - NC ranked #1 state for business expansion by Plant, Sites and Parks
Magazine- 1997
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TRANSACTION SUMMARY
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TRANSACTION SUMMARY
- - Fixed Exchange Ratio: 0.45 CENTURA SHARES FOR EACH TRIANGLE SHARE
- - Right to Walk/Cure 20% ABSOLUTE, 15% VERSUS INDEX OF BANK
STOCKS
- - Lock-up Options 19.9% OF TRIANGLE'S SHARES TO CENTURA AND 8.2%
OF CENTURA'S SHARES TO TRIANGLE
- - Price per Triangle Share(1): $23.40
- - Structure: POOLING OF INTERESTS/TAX-FREE EXCHANGE
- - Transaction Value(1): $608 MILLION
- - Expected Closing: LATE FIRST QUARTER OF 2000
- - Due Diligence: COMPLETED
- - Integration conversion: LATE FIRST QUARTER OF 2000
(1) Based on Centura's closing price of $52.00 on August 20, 1999.
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TRANSACTION SUMMARY
- - Management: MICHAEL S. PATTERSON (TRIANGLE) -
CHAIRMAN OF THE BOARD
CECIL W. SEWELL, JR. (CENTURA) -
CHIEF EXECUTIVE OFFICER
- - Board of Directors: 30 MEMBER BOARD:
CENTURA 23
TRIANGLE 7
- - Name: CENTURA BANKS, INC.
- - Headquarters: ROCKY MOUNT, NC
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BUSINESS CASE
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STRENGTHEN NORTH CAROLINA FRANCHISE
The transaction will significantly strengthen the North Carolina franchise by
leveraging all business lines across an expanded customer base.
BUSINESS LINES CENTURA TRIANGLE
- --------------------------------------------------------
Asset Management Y
Capital Markets Y
Cash Management Y Y
Commercial Banking Y Y
Corporate Banking Y
Insurance Y
International Services Y
Leasing Y Y
Retail Banking Y Y
Retail Brokerage Y Y
SBA Lending Y Y*
- --------------------------------------------------------
* Leading SBA Lender in North Carolina through first 9 months of SBA's 1999
fiscal year
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INCREASE PRESENCE IN MSA MARKETS
The transaction will enhance Centura's presence in MSA markets where there is
proven revenue growth opportunity, and will enhance financial performance in
smaller community markets.
100% NORTH CAROLINA OVERLAP TRIANGLE DEPOSIT COMPOSITION
[NORTH CAROLINA MAP] [PIE CHART]
Centura Only
Triangle Only MSA 71%
Overlap Non-MSA 29%
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PRO FORMA MSA MARKET SHARE
----------------------------------------------------- ------------------------------------------------
DEPOSITS MARKET SHARE RANK
----------------------------------------------------- ------------------------------------------------
CENTURA TRIANGLE PRO CENTURA TRIANGLE PRO
MSA STAND ALONE STAND ALONE FORMA* STAND ALONE STAND ALONE FORMA*
- ------------------- --------------- ------------- -------------- ------------- ------------------ ---------
Raleigh/Durham $ 633,579 $ 504,970 $ 1,138,549 7 8 5
Rocky Mount 672,144 248,514 920,658 1 2 1
Charlotte 252,274 196,731 449,005 10 11 9
Wilmington 205,425 31,443 236,868 5 12 5
Fayetteville 160,257 30,184 190,441 4 8 3
Goldsboro 88,383 72,099 160,482 3 5 3
Greenville 100,312 47,855 148,167 5 6 3
----------------------------------------------------- ------------------------------------------------
DEPOSITS MARKET SHARE RANK
----------------------------------------------------- ------------------------------------------------
CENTURA TRIANGLE PRO CENTURA TRIANGLE PRO
NON-MSA OVERLAP STAND ALONE STAND ALONE FORMA* STAND ALONE STAND ALONE FORMA*
- ------------------- --------------- ------------- -------------- ------------- ------------------ ---------
Harnett County $ 48,192 $ 71,406 $ 119,598 5 4 2
Robeson County 36,108 78,907 115,015 6 4 3
Granville County 50,637 57,961 108,598 4 3 2
* Before expected divestitures
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INCREASED REVENUE
The acquisition of Triangle's 80,000 households will enable Centura to
accelerate revenue growth.
[GRAPH]
Households Revenue
(Thousands) (Millions)
4Q96 333.295 95.04
332.428 91.56
2Q97 326.731 94.67
358.322 99.51
4Q97 367.043 105.22
382.005 104.01
2Q98 383.428 109.74
393.242 114.15
4Q98 373.608 115.18
396.363 114.76
2Q99 395.919 124.73
4Q99 397 128
400 139
2Q00 465 131
467 155
466 160
4Q00 470 167
469 166
2Q01 472 175
475 180
4Q01 475 188
Before expected divestitures
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FOCUS RETENTION STRATEGY
Centura has a proven track record of targeting and retaining high value
customers. Centura will focus on Triangle's 16,650 high value customers to
assure that the true value of the franchise is maintained.
[BAR CHART]
ANNUAL RETENTION CONSOLIDATION RETENTION
(5 traditional branches into In-Stores)
99.2%
93%
90% 97.2%
88%
91.2%
84%
96 97 98 99E 1 2 All
Centura's Best Customer Retention Profit Segment
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AVERAGE HOUSEHOLD PROFIT
If Triangle's household profitability increases over the next two years at the
same rate that Centura's average household profitability increased over the
last two years, Centura will realize an additional $6.7 million in pre-tax
income by 2001.
[BAR CHART]
CENTURA TRIANGLE (ESTIMATED)
$Profit Per Household $Profit Per Household
96 $38.21 98 $35.00
97 $40.06 99E $39.00
98 $43.29 00E $43.00
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LOW RISK TRANSACTION
Both Centura and Triangle have extensive merger integration experience. Since
Centura operates in each of Triangle's markets, a successful, smooth transition
is expected.
- - Successful 5 Year Acquisition and Integration History
-- Centura 13 acquisitions
-- Triangle 10 acquisitions
- - Cost Savings
-- Close and consolidate 26 Triangle or Centura branches in overlapping
markets
-- Divest additional branches as required by the Fed
-- Reprice Triangle's CD portfolio over the next two years, reducing
its average cost of CDs by 40 bps. This will lower Triangle's CD
cost to 5.20% compared to Centura's cost of 5.05%.
-- Eliminate significant administrative and support redundancies
- - Compatible Cultures
-- Retail/Small Business focus
-- Customer-centric
-- Several members of Senior Management have worked together in the
past
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LEVERAGE PAST AND FUTURE INVESTMENTS
The Triangle transaction enables Centura to build on its investments in:
- - Distribution and Access
-- Call Center
-- Internet/PC
-- ATMs
-- In-Stores
- - Database Technology
-- Information at the point of customer contact
-- Predictive Modeling
Human Capital
-- Extensive Recruiting and Training
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FINANCIAL INFORMATION
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CENTURA'S INVESTMENT CRITERIA
- - EPS Accretive by Year 2
- - EVA Accretive by Year 3
- - Positive PV EVA
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FINANCIAL SUMMARY
6 Months Ended 6/30/99
----------------------
*Centura(%) Triangle(%)
----------- -----------
ROA 1.26 1.26
ROE 15.92 16.18
Net Interest Margin 4.24 4.10
Efficiency Ratio 60.58 48.89
Noninterest Income as % of Total Revenue 31.10 20.10
Net Charge Offs/Average Loans 0.35 0.31
* Excludes the Restructuring charge ($8.4 Million before-tax) related to the
merger with First Coastal Bankshares, Inc. completed March 26, 1999.
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FINANCIAL ASSUMPTIONS
- - Cost Savings Reduction in non-interest expense
- 2000: $23.0 million pre-tax (41% of Triangle's pre-
transaction expense)
- 2001: $32.0 million pre-tax (55% of Triangle's pre-
transaction expense)
- - Impact of Divestitures:
- Divested Deposits Anticipate $200.0-$300.0 million, model assumes
$300.0 million divestiture
- Divested Income $1.0 million after-tax in 2000
$1.3 million after-tax in 2001
- - Impact of CD Repricing: Reduction in pricing of CD portfolio
- 2000: 20 bps ($1.8 million pre-tax)
- 2001: 40 bps ($3.6 million pre-tax)
- - Merger-Related Charge: $50.0 million pre-tax in quarter of closing
$10.0 million pre-tax in next quarter
- - Revenue Enhancements: No other assumed
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RECENT COMPARABLE TRANSACTIONS
Nationwide In-Market/Overlapping Transactions with deal values between $200M
and $1B; since 8/23/97
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSACTION PARTICIPANTS & DETAILS TRANSACTION MULTIPLES
- ----------------------------------------------------------------------------------------------------------------------------------
COST DEAL
ANN. SVGS VALUE
DATE BUYER ST SELLER ST (%) ($M)
- ----------------------------------------------------------------------------------------------------------------------------------
08/23/99 Centura Banks, Inc.** NC Triangle Bancorp NC 55 608
7/28/99 BB&T Corporation NC Premier Bancshares Inc. GA 25 598
7/12/99 Fifth Third Bancorp OH Peoples Bank Corp. of Indianapolis IN NA 230
6/30/99 Webster Financial Corp. CT New England Comm Bancorp Inc. CT 55 219
6/7/99 Sky Financial Group Inc. OH Mahoning National Bancorp Inc. OH 30 307
6/2/99 Peoples Heritage Fnl ME Banknorth Group Inc. VT 30 778
5/7/99 Zions Bancorporation UT Pioneer Bancorporation NV 15 347
12/16/98 Chittenden Corporation VT Vermont Financial Services Corp. VT 35 454
8/27/98 BB&T Corporation NC MainStreet Financial Corp. VA 30 540
8/11/98 FirstMerit Corporation OH Signal Corp. OH 34 473
7/16/98 First Commonwealth Fnl PA Southwest National Corporation PA NA 270
5/28/98 First American Corp. TN Pioneer Bancshares Inc. TN 40 292
4/21/98 Old Kent Financial Corp. MI First Evergreen Corporation IL 30 482
1/15/98 First Midwest Bancorp IL Heritage Financial Services Inc. IL 30 408
9/11/97 United Bankshares Inc. WV George Mason Bankshares Inc. VA 20 208
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AVERAGE 31 400
MEDIAN 30 377
- --------------------------------------------------------------------------------------------
TRANSACTION MULTIPLES SELLER'S DATA
- --------------------------------------------------------------------------------------------
PRICE/ PRICE/ PRICE/ PRICE/ TOTAL
ANN. BOOK TNG BK EPS* ASSETS ASSETS ROA ROE
DATE (%) (%) (x) (%) ($M) (%) (%)
- --------------------------------------------------------------------------------------------
08/23/99 356 412 24.33 26.60 2,285 1.26 16.18
7/28/99 339 347 22.07 30.35 1,511 1.58 16.60
7/12/99 418 418 27.44 35.35 650 1.23 15.25
6/30/99 290 310 27.59 27.79 787 1.11 11.77
6/7/99 316 316 21.44 37.91 809 1.85 15.40
6/2/99 235 306 22.05 17.94 4,339 1.23 16.75
5/7/99 513 513 26.07 33.60 1,031 1.44 21.52
12/16/98 208 286 27.94 21.52 2,110 0.89 8.71
8/27/98 320 340 27.38 25.49 2,042 1.02 12.68
8/11/98 322 467 23.40 31.12 1,520 1.09 15.26
7/16/98 326 326 30.78 36.36 742 1.17 10.46
5/28/98 284 301 29.69 29.40 993 0.97 9.47
4/21/98 243 248 26.68 24.95 1,933 0.94 9.51
1/15/98 338 394 24.15 31.75 1,285 1.39 16.12
9/11/97 291 292 26.31 21.63 963 0.89 11.75
------------------------------------------------------------------------------
AVERAGE 317 347 25.93 28.94 1.20 13.66
MEDIAN 318 321 26.50 29.88 1.14 13.97
* EPS for the last four quarters prior to announce
** Not included in averages or medians
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ESTIMATED PRE-TAX COST SAVINGS (FULLY PHASED-IN)
Total
($ in Millions)
---------------
Personnel
Branch $ 8.0
Administrative 10.0
---------------
18.0
---------------
Facilities and Equipment
Branch 5.0
Administrative 3.0
---------------
8.0
---------------
Other 6.0
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TOTAL $ 32.0
===============
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MERGER RELATED CHARGES
Total
($ in Millions)
---------------
Conversion Costs $ 12.0
Employee Related 18.0
Occupancy/Equipment Writedowns 15.0
Other 15.0
---------------
Total Pre-Tax Merger Related Charges $ 60.0
===============
Total After-Tax Merger Related Charges $ 39.0
===============
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EPS ACCRETION
($ in Millions, except per share) 2000E 2001E
- ----------------------------------------------- --------- ---------
Centura EPS (1) $ 4.46 $ 4.91
Centura Net Income (1) 128.89 141.90
Triangle Net Income (1) 31.20 34.32
--------- ---------
Combined Net Income 160.09 176.21
Cost Savings (after-tax) 15.02 21.02
Divestitures (after-tax) (1.00) (1.34)
Earnings on Reinvested Capital (after-tax) (2) 1.46 1.95
Savings on CD Repricing (after-tax) 1.18 2.36
--------- ---------
Pro Forma Earnings $ 176.75 $ 200.16
--------- ---------
Pro Forma EPS $ 4.35 $ 4.93
========= =========
- -----------------------------------------------------------------------
EPS Accretion (2.4%) 0.4%
- -----------------------------------------------------------------------
(1) IBES consensus estimates for 2000 and grown at 10% thereafter.
(2) Assumes after-tax earnings of 10% on reinvested capital.
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PRO FORMA FINANCIAL SUMMARY
Pro Forma
---------
Fully Phased-In(%)*
-------------------
ROA 1.51
ROE 18.23
Net Interest Margin 4.37
Efficiency Ratio 52.61
Noninterest Income as % of Total Revenue 29.31
Net Charge Offs/Average Loans 0.34
* Excludes the Restructuring charge ($8.4 Million before-tax) related to the
merger with First Coastal Bankshares, Inc. completed March 26, 1999.
* Assumes branch divestitures of $300 million.
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SUMMARY
The transaction with Triangle achieves these objectives:
- - Strengthens North Carolina Franchise
- - Leverages Centura's Strategy and Investments
- - Low Risk
- - Achieves Financial Objectives
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APPENDIX
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STRONG BALANCE SHEET AND SUPERIOR CREDIT QUALITY
- --------------------------------------------------------------------------------
Centura(%) Triangle(%) Combined(%)*
6/30/99 6/30/99
- --------------------------------------------------------------------------------
Average Equity / Assets 7.92 7.77 8.29
Average Tangible Equity / Assets 6.18 6.80 6.67
Loans / Earning Assets 72.18 71.25 72.67
NCOs / Average Loans 0.35 0.32 0.35
NPAs / Assets 0.68 0.23 0.61
NPLs / Loans 0.96 0.23 0.83
- --------------------------------------------------------------------------------
* Assumes branch divestitures of $300 million.
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LOAN COMPOSITION
(At June 30, 1999; Dollars in millions)
Centura Triangle Combined
Amount (%) Amount (%) Amount (%)
- ---------------------------------------------------------------------------------------------------------------------------
Residential Mortgages $ 1,518.3 26.0% $ 335.5 22.2% $ 1,853.8 25.2%
Commercial Loans & Leases 1,507.5 25.8 243.9 16.2 1,751.4 23.8
Commercial Mortgages 1,266.2 21.7 443.9 29.4 1,710.2 23.3
Construction & Land Dev. 748.8 12.8 259.0 17.2 1,007.8 13.7
Home Equity Loans 245.8 4.2 97.5 6.5 343.3 4.7
Credit Cards 76.6 1.3 11.0 0.7 87.6 1.2
Other (Including Consumer) 478.4 8.2 118.5 7.8 596.9 8.1
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $ 5,841.6 100.0% $ 1,509.3 100.0% $ 7,351.0 100.0%
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DEPOSIT COMPOSITION
(At June 30, 1999; Dollars in millions)
Centura* Triangle Combined
Amount % Amount % Amount %
- ----------------------------------------------------------------------------------------------------------------
Non-Interest Bearing $ 982.1 16.3% $ 228.9 13.1% $ 1,211.0 15.6%
Interest Bearing:
NOW Accounts $ 754.9 12.5 $ 180.8 10.3 $ 935.7 12.0
Money Market 1,677.2 27.8 289.8 16.5 1,967.0 25.3
CDs <$100,000 1,621.1 26.9 697.1 39.8 2,318.2 29.8
Jumbo CDs >$100,000 637.0 10.6 254.0 14.5 891.1 11.5
IRAs 352.2 5.8 100.8 5.8 453.0 5.8
Total Interest Bearing $ 5,042.4 83.7 $ 1,522.6 86.9 $ 6,564.9 84.4
- ----------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $ 6,024.4 100.0% $ 1,751.5 100.0% $ 7,775.9 100.0%
* Domestic deposit data only.
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