SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): May 17, 1996
- --------------------------------------------------------------------------------
CENTURA BANKS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
North Carolina 1-10646 56-1688522
- --------------------------------------------------------------------------------
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
134 North Church Street, Rocky Mount, North Carolina 27804
- --------------------------------------------------------------------------------
Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (919) 977-4400
- --------------------------------------------------------------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Centura Banks, Inc.
Item 2. Acquisition or Disposition of Assets.
As additional information to security holders and investors, the Registrant,
pursuant to Article 11, Rule 11-01(a)(8), of Regulation S-X, is providing pro
forma financial information as identified in Item 7.
Item 7. Financial statements and Exhibits.
(b) Pro Forma financial information.
The following unaudited pro forma combined condensed balance sheet as of March
31, 1996, and the unaudited pro forma combined condensed income statements for
the three months ended March 31, 1996, and for the year ended December 31, 1995,
give effect to the affiliation with Centura Banks, Inc. ("Centura") of First
Community Bank, Gastonia, North Carolina ("FCB"), presented under the purchase
method of accounting, which requires that all assets and liabilities be adjusted
to their estimated fair value as of the date of the acquisition. In connection
with the acquisition of FCB, management anticipates that it will acquire up 100
percent of the shares to be exchanged in the combination, as approved by
Centura's Board of Directors. The pro forma financial information presented
herein gives effect to the possible purchase by Centura of these shares. Pro
forma adjustments to the balance sheet are computed as if the transaction
occurred at March 31, 1996, while pro forma adjustments to the income statements
presented are computed as if the transaction were consummated at January 1,
1995.
Additionally, the unaudited pro forma combined condensed balance sheet as of
March 31, 1996, and the unaudited pro forma combined condensed income statements
for the three months ended March 31, 1996, and for the three-year period ended
December 31, 1995, combine the historical financial statements of Centura with
FirstSouth Bank, Burlington, North Carolina ("FSB"), after giving effect to the
merger of both entities using the pooling-of-interests method of accounting. In
connection to the merger with FSB, management anticipates that it will acquire
up to 9.9 percent of the shares to be exchanged in the combination, as approved
by Centura's Board of Directors. However, the pro forma financial information
presented herein does not give effect to the possible purchase by Centura of
these shares. Pro forma adjustments to the balance sheet are computed as if the
transaction occurred at March 31, 1996, while pro forma adjustments to the
income statements are computed as if the transaction were consummated on January
1 of the earliest period presented.
The historical information presented for Centura has been restated to include
the effects of the First Commercial Holding Corp. merger that was consummated on
February 27, 1996, and accounted for using the pooling-of-interests method of
accounting.
The pro forma statements are provided for informational purposes only. The pro
forma fully combined financial information set forth herein reflects the
consummation of the acquisitions noted above as presently contemplated, which
event is in Centura's judgment, most likely to occur. The pro forma financial
information is not necessarily indicative of
actual results that would have been achieved had the transaction been
consummated on March 31, 1996, or at the beginning of the periods presented, and
is not necessarily indicative of future results. The pro forma statements should
be read in conjunction with the audited consolidated financial statements of
Centura and the notes thereto included in Centura's annual report on Form 10-K
for the year ended December 31, 1995, and Centura's quarterly reports on Form
10-Q for the quarter ended March 31, 1996.
CENTURA BANKS, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
As of March 31, 1996
(in thousands)
Historical
Centura Pro forma Pro forma
Banks, Inc. Historical FCB Registrant/ Historical FSB Fully
(Registrant) FCB Adjustments FCB FSB Adjustments Combined
-------------------------------------------------------------------------------------
(1,2) (1) (3) (1) (4)
ASSETS
Cash and due from banks $ 226,617 4,121 (750) 202,105 6,770 208,875
Investment securities: (27,883)
Available for sale 1,144,158 13,781 1,157,939 14,991 1,172,930
Held to maturity 282,030 14,862 296,892 14,728 311,620
Other interest-earning assets 3,814 6,800 10,614 15,273 25,887
Loans 3,686,316 82,304 3,768,620 124,469 3,893,089
Less allowance for loan losses 54,825 1,351 56,176 1,658 57,834
----------------------------------------------------------------------------------
Net loans 3,631,491 80,953 - 3,712,444 122,811 - 3,835,255
Bank premises and equipment 85,353 2,579 87,932 4,065 91,997
Other assets 172,736 2,118 16,570 191,424 2,668 194,092
-
===================================================================================
Total assets $ 5,546,199 125,214 (12,063) 5,659,350 181,306 - 5,840,656
===================================================================================
-
LIABILITIES -
Deposits: -
Demand, noninterest-bearing 593,897 14,326 608,223 28,237 636,460
Interest-bearing 3,573,777 90,669 3,664,446 134,758 3,799,204
Total deposits 4,167,674 104,995 4,272,669 162,995 4,435,664
Borrowed funds 638,222 7,313 645,535 - 645,535
Long-term debt 253,342 - 253,342 - 253,342
Other liabilities 76,725 843 77,568 1,647 79,215
- -
-----------------------------------------------------------------------------------
Total liabilities 5,135,963 113,151 - 5,249,114 164,642 - 5,413,756
-----------------------------------------------------------------------------------
-
SHAREHOLDERS' EQUITY -
Common stock 172,986 3,248 (3,248) 172,986 6,092 9,178 188,256
27,883
(27,883)
Additional paid in capital - 4,283 (4,283) - 9,178 (9,178) -
Common stock acquired by ESOP (503) - - (503) - - (503)
Unrealized securities gains (losses), net (2,844) (92) 92 (2,844) (13) - (2,857)
Retained earnings 240,597 4,624 (4,624) 240,597 1,407 - 242,004
-----------------------------------------------------------------------------------
Total shareholders' equity 410,236 12,063 (12,063) 410,236 16,664 - 426,900
-----------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 5,546,199 125,214 (12,063) 5,659,350 181,306 - 5,840,656
===================================================================================
Outstanding common shares 22,875,050 779,493 22,875,050 1,829,218 23,899,412
Book value per share $ 17.93 15.48 17.93 9.11 17.84
See notes to pro forma balance sheet.
CENTURA BANKS, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
As of March 31, 1996
(1) In the opinion of management of the respective companies included above,
all adjustments considered necessary for a fair presentation of the
financial position and results for the period presented have been
included. Adjustments, if any, are normal and recurring in nature.
(2) Centura's historical information has been restated for the First
Commercial Holding Corp. merger that was consummated February 27, 1996
and was accounted for as a pooling-of-interests.
(3) First Community Bank, Gastonia, NC ("FCB"):
a) Pro forma adjustments have been computed assuming the transaction was
consummated at March 31, 1996. The pro forma adjustments also include
the assumption that, simultaneously with the acquisition, Centura will
repurchase 100% of the shares to be issued in connection with the
acquisition and that there is no price differential between the stock
issued and repurchased. Such repurchase program will not in actuality
occur simultaneously with the consummation of the acquisition and may
result in less than a 100% repurchase. It is assumed that Centura will
utilize liquid assets currently available to Centura to fund the
repurchase of shares. Centura is authorized to repurchase up to 100%
under separate action approved by Centura's board of directors.
b) The purchase method of accounting requires that all assets and
liabilities be adjusted to their fair value as of the date of
acquisition. The estimated fair values of FCB's assets and liabilities
are not expected to be materially different from their recorded carrying
values; therefore, no pro forma valuation adjustments have been made.
The calculations of the estimated fair value of the net assets acquired
and cost associated with this transaction are:
In 000s
Value for outstanding FCB shares = .96 ER * 779,493 FCB shares * $34.875 price $ 26,097
(where ER is exchange ratio; price is Centura's closing price on 3/20/96, the date acquisition was announced)
Value for outstanding FCB options = (.96 ER*94,000 FCB 1,786
options)*($34.875-($14.48/.96)) (where the converted exercise
price is $14.48/.96 (weighted average exercise price of FCB options/ER))
Estimate for direct merger expenses 750
-------------
Estimate of Cost 28,633
-------------
Less estimate for fair value of net assets acquired 12,063
=============
Estimate of goodwill (i.e. excess of cost over fair value) $ 16,570
=============
(4) FirstSouth Bank, Burlington, NC ("FSB")
The merger of FSB is presented under the pooling-of-interests method of
accounting, with the issuance of an estimated 1,024,362 shares of
Centura common stock for the outstanding shares of FSB, given an
exchange ratio of .56 share Centura common stock for each share of FSB
common stock.
CENTURA BANKS, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
For the Three Months Ended March 31, 1996
(in thousands, except shares and per share)
Centura Pro forma Pro forma
Banks, Inc. Historical FCB Registrant/ Historical Fully
(Registrant) FCB Adjustments FCB FSB Combined
----------------------------------------------------------------------------------
(1,2) (1) (3,4) (1,5) (5)
Interest income $ 107,394 2,395 109,789 3,359 113,148
Interest expense 51,227 1,089 52,316 1,537 53,853
----------------------------------------------------------------------------------
Net interest income 56,167 1,306 - 57,473 1,822 59,295
Provision for loan losses (PFLL) 2,000 89 2,089 65 2,154
----------------------------------------------------------------------------------
Net interest income after PFLL 54,167 1,217 - 55,384 1,757 57,141
Noninterest income 18,941 221 19,162 302 19,464
Noninterest expense 47,758 949 276 48,983 1,288 50,271
----------------------------------------------------------------------------------
Income before income taxes 25,350 489 (276) 25,563 771 26,334
Income taxes 9,382 139 - 9,521 270 9,791
==================================================================================
Net income $ 15,968 350 (276) 16,042 501 16,543
==================================================================================
Earnings per common share:
Primary $ 0.68 0.45 0.68 0.26 0.67
Fully diluted 0.68 0.45 0.68 0.26 0.67
Average common shares:
Primary 23,434,371 774,275 23,434,371 1,962,547 24,533,397
Fully diluted 23,446,960 774,275 23,446,960 1,962,547 24,545,986
- ------------------------------------------
Notes:
(1) In the opinion of management of the respective companies included above,
all adjustments considered necessary for a fair presentation of the
financial position and results for the period presented have been
included.
Adjustments, if any, are normal and recurring in nature.
(2) Centura's historical information has been restated for the First
Commercial Holding Corp. merger that was consummated February 27, 1996
and was accounted for as a pooling-of-interests.
(3) Pro forma adjustments have been computed assuming that the transactions
presented were completed January 1, 1995.
(4) First Community Bank, Gastonia, NC ("FCB"):
a) The pro forma adjustments assume that, simultaneously with the
acquisition, Centura repurchased or completed its repurchase of 100% of
the shares to be issued in connection with the FCB acquisition and that
there was no price differential between the stock issued and the stock
repurchased. b) Amortization of goodwill of $16,570,000 is over a 15-year
period (the period estimated to be benefited) using straight-line method
($1,105,000/year). Such amortization is not deductible for tax purposes;
thus, no adjustment is made for tax benefit of this expense. c) Pro forma
share and per share data are computed assuming the issuance of 743,304
additional average shares of Centura common stock in consummating the FCB
acquisition (at exchange ratio of .96), less 743,304 shares repurchased
simultaneously upon consummation.
(5) FirstSouth Bank, Burlington, NC ("FSB")
a) The merger of FSB is presented under the pooling-of-interests method
of accounting, with the issuance of Centura common stock for FSB common
stock at an exchange ratio of .56 share of Centura common stock for each
share of FSB common stock.
CENTURA BANKS, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
For the Year Ended December 31, 1995
(in thousands, except shares and per share)
Centura Pro forma Pro forma
Banks, Inc. Historical FCB Registrant/ Historical Fully
(Registrant) FCB Adjustments FCB FSB Combined
---------------------------------------------------------------------------------
(1,2) (1) (3,4) (1,5) (5)
Interest income $ 394,831 9,178 404,009 12,419 416,428
Interest expense 181,593 4,059 185,652 5,628 191,280
-------------------------------------------------------------------------------
Net interest income 213,238 5,119 - 218,357 6,791 225,148
Provision for loan losses (PFLL) 7,709 577 8,286 195 8,481
-------------------------------------------------------------------------------
Net interest income after PFLL 205,529 4,542 - 210,071 6,596 216,667
Noninterest income 60,703 762 61,465 1,125 62,590
Noninterest expense 173,184 3,418 1,105 177,707 4,906 182,613
-------------------------------------------------------------------------------
Income before income taxes 93,048 1,886 (1,105) 93,829 2,815 96,644
Income taxes 33,334 542 - 33,876 1,002 34,878
===============================================================================
Net income $ 59,714 1,344 (1,105) 59,953 1,813 61,766
===============================================================================
Earnings per common share:
Primary $ 2.54 1.73 2.55 0.95 2.51
Fully diluted 2.54 1.70 2.54 0.93 2.50
Average common shares:
Primary 23,548,920 774,741 23,548,920 1,912,278 24,619,796
Fully diluted 23,595,644 788,590 23,595,644 1,940,321 24,682,224
- ---------------------------------------------
Notes:
(1) In the opinion of management of the respective companies included above,
all adjustments considered necessary for a fair presentation of the
financial position and results for the period presented have been
included.
Adjustments, if any, are normal and recurring in nature.
(2) Centura's historical 1995 information has been restated for the First
Commercial Holding Corp. merger that was consummated February 27, 1996
and was accounted for as a pooling-of-interests.
(3) Pro forma adjustments have been computed assuming that the transactions
presented were completed January 1, 1995.
(4) First Community Bank, Gastonia, NC ("FCB"):
a) The pro forma adjustments assume that, simultaneously with the
acquisition, Centura repurchased or completed its repurchase of 100% of
the shares to be issued in connection with the FCB acquisition and that
there was no price differential between the stock issued and the stock
repurchased. b) Amortization of goodwill of $16,570,000 is over a 15-year
period (the period estimated to be benefited) using straight-line method
($1,105,000/year). Such amortization is not deductible for tax purposes;
thus, no adjustment is made for tax benefit of this expense. c) Pro forma
share and per share data are computed assuming the issuance of the shares
noted above at exchange ratio of .96, less an equivalent number of shares
repurchased simultaneously upon consummation.
(5) FirstSouth Bank, Burlington, NC ("FSB")
a) The merger of FSB is presented under the pooling-of-interests method
of accounting, with the issuance of Centura common stock for FSB common
stock at an exchange ratio of .56 share of Centura common stock for each
share of FSB common stock. Historical FSB per share amounts and average
common shares have been restated to reflect the 5% stock dividend
declared by FSB in first quarter 1996.
CENTURA BANKS, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
For the Year Ended December 31, 1994
(in thousands, except shares and per share)
Centura Pro forma
Banks, Inc. Historical Fully
(Registrant) FSB Combined
------------------------------------------------------
(1,2) (1,3)
Interest income $ 305,123 9,316 314,439
Interest expense 114,578 3,533 118111
-------------------------------------------------
Net interest income 190,545 5,783 196,328
Provision for loan losses (PFLL) 7,005 215 7220
-------------------------------------------------
Net interest income after PFLL 183,540 5,568 189,108
Noninterest income 50,115 1,059 51174
Noninterest expense 152,355 4,412 156,767
-------------------------------------------------
Income before income taxes 81,300 2,215 83,515
Income taxes 29,161 804 29,965
=================================================
Net income $ 52,139 1,411 53,550
=================================================
Earnings per common share:
Primary $ 2.31 0.76 2.26
Fully diluted 2.30 0.76 2.26
Average common shares:
Primary 22,614,210 1,852,092 23,651,381
Fully diluted 22,678,421 1,861,036 23,720,601
- ---------------------------------------
Notes:
(1) In the opinion of management of the respective companies included
above, all adjustments considered necessary for a fair presentation of
the financial position and results for the period presented have been
included.
Adjustments, if any, are normal and recurring in nature.
(2) Centura's historical 1994 information has been restated for the First
Commercial Holding Corp. merger that was consummated February 27, 1996
and was accounted for as a pooling-of-interests.
(3) FirstSouth Bank, Burlington, NC ("FSB")
a) The merger of FSB is presented under the pooling-of-interests method
of accounting, with the issuance of Centura common stock for FSB common
stock at an exchange ratio of .56 share of Centura common stock for
each share of FSB common stock. Historical FSB per share amounts and
average common shares have been restated to reflect the 5% stock
dividend declared by FSB in first quarter 1996.
CENTURA BANKS, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
For the Year Ended December 31, 1993
(in thousands, except shares and per share)
Centura Pro forma
Banks, Inc. Historical Fully
(Registrant) FSB Combined
---------------------------------------------
(1,2) (1,3)
Interest income $ 264,188 7,819 272,007
Interest expense 103,533 3,062 106,595
----------------------------------------------
Net interest income 160,655 4,757 165,412
Provision for loan losses (PFLL) 8,841 310 9,151
----------------------------------------------
Net interest income after PFLL 151,814 4,447 156,261
Noninterest income 52,459 1,272 53,731
Noninterest expense 138,938 3,919 142,857
----------------------------------------------
Income before income taxes 65,335 1,800 67,135
Income taxes 22,166 659 22,825
==============================================
Net income $ 43,169 1,141 44,310
==============================================
Earnings per common share:
Primary $ 2.09 0.64 2.04
Fully diluted 2.05 0.64 2.00
Average common shares:
Primary 20,696,145 1,769,616 21,687,130
Fully diluted 21,203,238 1,769,616 22,194,223
- ---------------------------------------
Notes:
(1) In the opinion of management of the respective companies included
above, all adjustments considered necessary for a fair presentation of
the financial position and results for the period presented have been
included.
Adjustments, if any, are normal and recurring in nature.
(2) Centura's historical 1993 information has been restated for the First
Commercial Holding Corp. merger that was consummated February 27, 1996
and was accounted for as a pooling-of-interests.
(3) FirstSouth Bank, Burlington, NC ("FSB")
a) The merger of FSB is presented under the pooling-of-interests method
of accounting, with the issuance of Centura common stock for FSB common
stock at an exchange ratio of .56 share of Centura common stock for
each share of FSB common stock. Historical FSB per share amounts and
average common shares have been restated to reflect the 5% stock
dividend declared by FSB in first quarter 1996.