EXHIBIT 99
For Immediate Release
April 12, 2001
For more information: Steven J. Goldstein Terry Earley
Chief Financial Officer Investor Relations
Centura Banks, Inc. Centura Banks, Inc.
(252) 454-8356 (252) 454-4453
sgoldstein@centura.com tearley@centura.com
CENTURA BANKS, INC. REPORTS FIRST-QUARTER NET INCOME OF $0.89 PER DILUTED SHARE
ROCKY MOUNT, N.C., April 12, 2001 - Centura Banks Inc. (NYSE: CBC) today
announced first-quarter net earnings of $35.5 million, or $0.89 per diluted
share. This compares with $35.8 million, or $0.90 cents per diluted share, for
the fourth quarter of 2000, and $36.0 million, or $0.90 cents per diluted share,
excluding merger-related charges, for the same period a year ago.
"Centura continued to perform in line with our expectations during the first
quarter," said Cecil W. Sewell, chief executive officer. "Our overall
performance was consistent and encouraging, despite the slowdown in the economy
and the deterioration in consumer confidence that continued to impact our
industry. Annualized commercial loan growth was on target for the quarter and
core deposits exhibited growth in the last two months of the period."
Noninterest income for the first quarter rose to $45.1 million from $43.3
million in the fourth quarter. Business units exhibiting growth during the
period included commercial mortgage, residential mortgage and insurance. The
increase also included a gain of $2.8 million that resulted from the sale of a
private company in which Centura holds an interest. As expected, performance in
the company's brokerage division was affected by the declining stock market and
slowing economy while deposit fees were also down as compared to fourth quarter
in response to seasonal factors.
Centura's first-quarter net interest margin was 4.07 percent, compared with 4.14
percent in the fourth quarter. The decline was due to Centura's decision to
increase its investment portfolio, which increased on average 12 percent over
the fourth quarter, as a means of managing capital in the absence of share
repurchases. Centura was precluded from repurchasing its own stock as part of
its Jan. 26, 2001, agreement to be acquired by Royal Bank of Canada (NYSE, TY:
RY). Centura's board of directors officially rescinded the 1.5-million-share
repurchase program late in the first quarter of 2001 subsequent to the merger
announcement. Under the program announced in September 2000, the company
repurchased approximately 552,000 shares but has not been active in the market
since December.
Addressing first-quarter credit quality, Sewell said: "Centura's asset quality
remains solid, despite the weakened economic environment that has resulted in a
general industry-wide increase in nonperforming assets. The overall quality of
our loan portfolio remains strong, and our allowance for loan losses is fully
adequate at 1.35 percent of total loans at the end of the period. Net charge
offs, at 0.35 percent of average loans, were in line with our expectations for
the quarter.
"As we move forward in 2001, we will continue to focus on retaining and
expanding our relationship with Centura's most valuable customers," Sewell said.
"Our combination with Royal Bank of Canada will better position Centura to
provide our customers with the high level of personalized service they have come
to expect from us, with the added resources available through Royal Bank of
Canada. We are very excited about the potential this combination affords
Centura's customers, employees and shareholders."
Centura's definitive agreement to be acquired by Royal Bank of Canada requires
that each Centura share will be exchanged for 1.684 shares of Royal Bank. The
transaction remains subject to regulatory approvals and shareholder vote. It is
expected to close by mid-summer.
About Centura
Centura Banks Inc., a $12 billion-asset financial services company based in
North Carolina, provides a complete line of banking, investment, insurance,
leasing and asset management services to individuals and businesses in North
Carolina, South Carolina and Virginia. Centura's broad range of financial
solutions is provided through more than 240 full-service financial offices and
Centura Highway, the bank's multifaceted customer access system that includes
telephone banking, an extensive ATM network, PC banking, online bill payment and
the bank's suite of Internet products and services. Additional information may
be found on Centura's website at www.centura.com.
Safe Harbor
Statements made in this press release, other than those containing historical
information, are forward-looking statements made pursuant to the safe-harbor
provisions of the Private Securities Litigation Act of 1995. These include
statements about Centura, including descriptions of goals, expectations,
projections, estimates, intentions, plans and objectives of its management for
future operations, products or services, and forecasts of its revenues, earnings
or other measures of economic performance. One can identify these
forward-looking statements by the use of words such as "expects," "plans,"
"believes," "will," "estimates," "intends," "projects," "goals," and other words
of similar meaning. One can identify them by the fact that they do not strictly
relate to historical or current facts. Such statements reflect current views,
but are based on assumptions and involve significant risks and uncertainties and
are subject to change based on various factors, many of which are beyond
Centura's control. Those factors include, but are not limited to, the following:
(i) customer and deposit attrition, or revenue loss, following completed mergers
may be greater than expected; (ii) competitive pressure in the banking industry
may increase significantly; (iii) changes in the interest rate environment may
reduce margins; (iv) general economic conditions, either nationally or
regionally, may be less favorable than expected, resulting in, among other
things, credit quality deterioration and the possible impairment of
collectibility of loans; (v) the impact of changes in monetary and fiscal
policies, laws, rules and regulations; (vi) the impact of the Gramm-Leach-Bliley
Act of 1999; (vii) changes in business conditions and inflation; (viii) the
impact to revenue and expenses in the event that announced mergers do not
consummate as anticipated; and (ix) other risks and factors identified in
Centura's filings with the Securities and Exchange Commission and other
regulatory bodies.
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
-------------------------------------------------
(Dollars in thousands, except per share data) 2001 2000 Change
- ---------------------------------------------------------------------------------------------------------------------------
EARNINGS
Interest income $ 226,260 $ 215,432 5.0%
Interest expense 118,995 110,624 7.6
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Net interest income 107,265 104,808 2.3
Provision for loan losses 7,170 5,975 20.0
Noninterest income 45,115 28,269 59.6
Noninterest expense 90,982 110,642 (17.8)
Income taxes 18,707 8,425 122.0
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Net income $ 35,521 $ 8,035 342.1%
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Net interest income, taxable equivalent $ 109,847 $ 107,738 2.0%
====================================================================================================================
PER COMMON SHARE
Earnings per share - basic $ 0.90 $ 0.20 350.0%
Earnings per share - diluted 0.89 0.20 345.0
Cash dividends paid 0.34 0.32 12.5
Book value per share 25.00 21.72 15.1
Closing market price 49.450 45.813 7.9
SELECTED FINANCIAL DATA (A)
Earnings per share - diluted $ 0.89 $ 0.90 (1.1)%
Return on average assets 1.22% 1.28 (6)bp
Return on average equity 14.63 16.81 (218)
FINANCIAL RATIOS
Return on average assets 1.22% 0.29% 93bp
Return on average equity 14.63 3.76 1,087
Average equity to average assets 8.37 7.59 78
AVERAGE BALANCES
Assets $11,764,869 $11,333,016 3.8%
Earning assets, net 10,805,374 10,408,008 3.8
Loans, gross 7,721,247 7,481,313 3.2
Investment securities, net 2,981,039 2,774,077 7.5
Unrealized gains(losses) on available-for-sale securities 51,671 (74,441) 169.4
Noninterest-bearing deposits 1,063,523 1,105,151 (3.8)
Core deposits 6,832,345 6,975,082 (2.0)
Total deposits 7,484,106 7,819,217 (4.3)
Interest-bearing liabilities 9,528,849 9,256,578 2.9
Shareholders' equity 984,483 860,095 14.5
PERIOD END BALANCES
Assets $11,926,388 $11,206,613 6.4%
Earning assets, net 10,952,384 10,256,509 6.8
Loans, gross 7,748,130 7,565,897 2.4
Investment securities, net 3,078,052 2,607,341 18.1
Unrealized gains(losses) on available-for-sale securities 66,878 64,592 3.5
Noninterest-bearing deposits 1,116,991 1,174,585 (4.9)
Core deposits 6,882,011 6,956,145 (1.1)
Total deposits 7,542,161 7,752,991 (2.7)
Shareholders' equity 990,834 861,381 15.0
bp- Change is measured as difference in basis points.
(A) Calculation excludes $39.4 million of merger-related and other significant
charges for 2000. Included in the merger-related and other significant
charges for 2000 were $15.1 million in losses related to sales of certain
investment securities incurred as a result of restructuring the investment
portfolio acquired with the Triangle merger.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
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(Dollars in thousands) 2001 2000 Change
- ----------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
Average basic 39,556,008 39,598,371 (0.1)%
Average diluted 40,027,011 39,926,443 0.3
Outstanding at period end 39,633,208 39,662,141 (0.1)
COMPOSITION RATIOS (A)
Earning assets to total assets 91.84% 91.84% 0 bp
Loans to earning assets 71.46 71.88 (42)
Interest-bearing liabilities to earning assets 88.19 88.94 (75)
Loans to total deposits 103.17 95.68 749
Noninterest-bearing deposits to total deposits 14.21 14.13 8
ALLOWANCE FOR LOAN LOSSES (AFLL)
Beginning balance $ 104,275 $ 95,500 9.2%
Provision for loan losses 7,170 5,975 20.0
Charge-offs (8,414) (6,515) 29.1
Recoveries 1,674 2,490 (32.8)
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Net charge-offs (6,740) (4,025) 67.5
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Ending balance $ 104,705 $ 97,450 7.4%
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Net charge-offs to average loans 0.35% 0.22% 13bp
COMPOSITION OF RISK ASSETS
Nonperforming loans (C) $ 51,301 $ 32,372 58.5%
Foreclosed property 7,240 4,789 51.2
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Nonperforming assets $ 58,541 $ 37,161 57.5%
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Loans 90+ days past due, still accruing $ 18,451 $ 11,887 55.2%
ASSET QUALITY RATIOS (B) (C)
Nonperforming assets (NPA's) to:
Loans and foreclosed property 0.75% 0.49% 26bp
Total assets 0.49 0.33 16
Nonperforming loans (NPL's) to total loans 0.66 0.43 23
Allowance for loan losses to total loans 1.35 1.29 6
Allowance for loan losses to nonperforming loans 2.04x 3.01x (97)
bp- Change is measured as difference in basis points.
(A) Balance sheet amounts used in calculations are based on average balances.
(B) Balance sheet amounts used in calculations are based on period end
balances.
(C) Excludes $4.8 million of NPL's classified as held for accelerated
disposition at March 31, 2001. Including these NPL's, NPA's to loans and
foreclosed property were 0.81%, NPA's to total assets were 0.53%, NPL's to
total loans were 0.72%, and the AFLL to NPL's was 1.88x.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
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As a Percent of
Average Assets (A)
--------------------------
(Dollars in thousands) 2001 2000 Change 2001 2000
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NONINTEREST INCOME
Service charges on deposit accounts $ 15,295 $ 15,355 (0.4)% 0.53% 0.55%
Credit card and related fees 2,124 2,071 2.6 0.07 0.07
Insurance and brokerage commissions 6,232 7,167 (13.0) 0.22 0.25
Other service charges, commissions and fees 3,081 3,645 (15.5) 0.11 0.13
Fees for trust services 2,665 2,751 (3.1) 0.09 0.10
Mortgage income 5,463 3,705 47.4 0.19 0.13
Negative goodwill amortization 334 334 - 0.01 0.01
Operating lease income, net 414 699 (40.8) 0.01 0.03
Other noninterest income 8,757 7,397 18.4 0.30 0.26
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Noninterest income, excluding securities transactions 44,365 43,124 2.9 1.53 1.53
Securities gains (losses), net 750 220 240.9 0.03 0.01
Securities gains (losses), net - merger related - (15,075) (100.0) - (0.54)
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Total noninterest income $ 45,115 $ 28,269 59.6% 1.56% 1.00%
===================================================================================================================================
NONINTEREST EXPENSE
Salaries and overtime $ 37,452 $ 35,618 5.1% 1.29% 1.26%
Fringe benefits and other personnel costs 10,484 8,148 28.7 0.36 0.29
Occupancy 6,367 6,453 (1.3) 0.22 0.23
Equipment 6,754 6,148 9.9 0.23 0.22
Foreclosed real estate losses and related operating expense 605 662 (8.6) 0.02 0.02
Marketing 2,450 1,479 65.7 0.08 0.05
Fees for outsourced services 5,576 4,369 27.6 0.19 0.16
Professional and legal fees 4,245 3,084 37.6 0.15 0.11
Other administrative 3,071 2,970 3.4 0.11 0.11
FDIC insurance 365 438 (16.7) 0.01 0.02
Deposit intangible and goodwill amortization 4,132 3,153 31.1 0.14 0.11
Office supplies, postage and telephone 6,474 6,373 1.6 0.22 0.23
Other operating 3,325 7,409 (55.1) 0.13 0.25
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Total NIE before merger-related and other significant charges 91,300 86,304 5.8 3.15 3.06
Merger-related expenses and other significant charges (318) 24,338 (101.3) (0.01) 0.87
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Total noninterest expense $ 90,982 $ 110,642 (17.8)% 3.14% 3.93%
===================================================================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin (B)(D) 36.46% 38.92% (246)bp
Efficiency ratio (C)(D) 58.92 57.12 179
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.04% 8.94% 10bp
Taxable securities 7.22 6.63 59
Tax-exempt securities 8.69 7.75 94
Short-term investments 5.54 5.18 36
Mortgage loans held-for-sale 8.00 9.05 (105)
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Interest-earning assets 8.53 8.29 24
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Total interest-bearing deposits 4.72 4.39 33
Borrowed funds 5.42 5.68 (26)
Long-term debt 6.17 6.06 11
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Total interest-bearing liabilities 5.70 4.78 92
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Interest rate spread 2.83 3.51 (68)
Net interest margin 4.07 4.07 -
bp- Change is measured as difference in basis points.
(A) Data presented is annualized.
(B) Sum of income before taxes plus the taxable equivalent adjustment divided
by the sum of taxable equivalent net interest income plus noninterest
income.
(C) Noninterest expense divided by the sum of taxable equivalent net interest
income plus noninterest income.
(D) Calculation excludes merger-related and other significant charges.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARIES
2001 2000
---------- ------------------------------------------------ 1st Qtr 01
First Fourth Third Second First vs.
(Dollars in thousands, except per share data) Quarter Quarter Quarter Quarter Quarter 4th Qtr 00
- -------------------------------------------------------------------------------------------------------------------- -------------
FINANCIAL SUMMARY (A)
Assets $11,764,869 $11,405,683 $11,261,701 $11,087,991 $11,333,016 3.1%
Earning assets, net 10,805,374 10,466,489 10,323,647 10,161,950 10,408,008 3.2
Loans, gross 7,721,247 7,713,182 7,631,191 7,604,252 7,481,313 0.1
Investment securities, net 2,981,039 2,655,105 2,599,384 2,456,812 2,774,077 12.3
Total deposits 7,484,106 7,655,687 7,584,598 7,581,910 7,819,217 (2.2)
Interest-bearing liabilities 9,528,849 9,225,498 9,114,564 8,974,603 9,256,578 3.3
Shareholders' equity 984,483 926,344 902,196 869,319 860,095 6.3
Total market capitalization (period end) 1,959,862 1,902,355 1,527,838 1,353,339 1,817,042 3.0
Net income 35,521 35,794 34,003 20,923 8,035 (0.8)
Full-time equivalents 3,327 3,379 3,443 3,450 3,450 (1.5)
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating profit margin(B) 36.46% 36.23% 37.10% 31.80% 38.92% 23bp
Efficiency ratio(B) 58.92 59.23 58.16 60.07 57.12 (31)
Net interest margin 4.07 4.14 4.06 4.10 4.07 (7)
Return on average assets 1.22 1.25 1.20 0.76 0.29 (2)
Return on average equity 14.63 15.37 15.00 9.68 3.76 (74)
Average equity to average assets 8.37 8.12 8.01 7.84 7.59 25
PER SHARE SUMMARY
Earnings per share - basic $ 0.90 $ 0.91 $ 0.85 $ 0.53 $ 0.20 (1.1)%
Earnings per share - diluted 0.89 0.90 0.85 0.52 0.20 (1.1)
Cash dividends paid 0.34 0.34 0.34 0.34 0.32 5.9
Book value per share 25.00 24.26 23.05 22.09 21.72 3.1
Closing market price 49.450 48.250 38.313 33.953 45.813 2.5
KEY INTANGIBLE ASSETS (C)
Goodwill $ 136,158 $ 139,928 $ 143,520 $ 125,606 $ 131,514 (2.7)%
Mortgage servicing rights 6,779 6,517 6,037 31,797 35,076 4.0
ASSET QUALITY SUMMARY(C)
Nonperforming assets (NPA's)(D) $ 58,541 $ 54,372 $ 54,631 $ 45,929 $ 37,161 7.7%
Allowance for loan losses 104,705 104,275 104,036 103,271 97,450 0.4
Nonperforming assets to total assets (D) 0.49% 0.47% 0.48% 0.41% 0.33% 2bp
Allowance for loan losses to total loans 1.35 1.36 1.35 1.35 1.29 (1)
Net charge-offs to average loans 0.35 0.33 0.32 0.32 0.22 2
bp- Change is measured as difference in basis points.
(A) Balance sheet amounts are based on average balances unless otherwise noted.
(B) Calculation excludes merger-related and other significant charges.
(C) Balance sheet amounts are based on period end balances unless otherwise
noted.
(D) Excludes $4.8 million and $6.0 million of nonperforming loans (NPL's)
classified as held for accelerated disposition at March 31, 2001 and
December 31, 2000, respectively. Including these NPL's, NPA's to total
assets were 0.53% and 0.51% for the quarters ended March 31, 2001 and
December 31, 2000, respectively.