For Immediate Release
July 2, 1996
Contact: Frank L. Pattillo
(919) 977-8341
fpattillo@centura.com
CENTURA BANKS INC. REPORTS SECOND QUARTER EARNINGS INCREASE
ROCKY MOUNT, N.C. -- Centura Banks Inc. (NYSE:CBC) announced today that
net income for the second quarter of 1996 increased 13.9 percent to $16.5
million compared to $14.5 million for the same period one year ago. Fully
diluted earnings per share increased to 71 cents from 62 cents in the second
quarter of 1995.
For the first six months of 1996, net income increased 11.7 percent to
$32.4 million from $29 million in the first half of 1995. Fully diluted earnings
per share rose 9.4 percent to $1.39 from $1.27 during the same period last year.
The increase in earnings results from continued strong growth in
noninterest income, which increased 43.7 percent from the second quarter of 1995
to $19.8 million. The most important factors contributing to noninterest income
growth were significant increases in commissions earned by Centura's brokerage
and insurance subsidiaries and income generated from mortgage activities.
-more-
CENTURA REPORTS SECOND QUARTER EARNINGS INCREASE
PAGE TWO
JULY 2, 1996
"We are pleased with the progress we are making, especially in
securities and insurance sales," said Robert R. Mauldin, Centura's chairman and
chief executive officer. "The investments we have been making are paying off,
our asset quality remains very good and our net interest margin is improving.
This performance confirms we have been making the right decisions and are
continuing to improve in critical areas."
For the quarter, return on assets was 1.19 percent and return on equity
was 16.43 percent. Deposits increased 11.5 percent to $4.2 billion. Loans
increased 10.6 percent to $3.8 billion, and net charge-offs were .09 percent of
average total loans.
Centura's net interest margin showed improvement from the first quarter
of this year, although it was still lower than the second quarter of 1995. The
net interest margin for the second quarter of 1996 was 4.60 percent.
With assets of $5.6 billion, Centura provides a complete line of
banking, investment, insurance and trust services to individuals and businesses
throughout North Carolina. It provides services through 155 financial centers,
more than 200 ATMs at financial centers, Wal-Mart and Sam's stores, its Centura
Highway telephone banking center and Quicken and Microsoft Money, the leading
personal finance software packages. Centura recently announced it will open 33
bank offices in Hannaford supermarkets in the Carolinas and Virginia by the end
of 1997.
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
----------------------------------- -------------------------------------
(In thousands, except share and per share data) 1996 1995 Change 1996 1995 Change
- --------------------------------------------------------------------------------------------------------------------------------
EARNINGS
Interest income $ 108,521 $ 96,087 12.9% $ 215,915 $ 182,404 18.4%
Interest expense 50,002 43,694 14.4 101,229 79,767 26.9
- -------------------------------------------------------------------------------------------------------------------------------
Net interest income 58,519 52,393 11.7 114,686 102,637 11.7
Provision for loan losses 2,325 2,065 12.6 4,325 3,884 11.4
Noninterest income 19,826 13,797 43.7 38,767 27,421 41.4
Noninterest expense 49,750 41,426 20.1 97,508 80,524 21.1
Income taxes 9,814 8,247 19.0 19,196 16,611 15.6
- -------------------------------------------------------------------------------------------------------------------------------
Net income $ 16,456 $ 14,452 13.9% $ 32,424 $ 29,039 11.7%
===============================================================================================================================
Net interest income, taxable equivalent $ 59,971 $ 53,624 11.8% $ 117,660 $ 105,103 11.9%
===============================================================================================================================
PER COMMON SHARE
Net income-primary $ 0.71 0.62 14.5% $ 1.39 1.27 9.4%
Net income-fully diluted 0.71 0.62 14.5 1.39 1.27 9.4
Cash dividends paid 0.25 0.20 25.0 0.50 0.39 28.2
Book value 17.73 17.69 0.2 17.73 17.69 0.2
Closing market price 36.75 27.88 31.8 36.75 27.88 31.8
FINANCIAL RATIOS
Return on average assets 1.19% 1.22% (3)bp 1.18% 1.28% (10)bp
Return on average shareholders' equity 16.43 14.96 147 16.00 16.00 0
Equity to assets (average) 7.26 8.17 (91) 7.40 8.01 (61)
AVERAGE BALANCES
Assets $ 5,552,455 $ 4,742,000 17.1% $ 5,508,122 $ 4,571,954 20.5%
Earning assets 5,144,066 4,371,028 17.7 5,106,965 4,218,418 21.1
Loans 3,754,884 3,395,950 10.6 3,691,366 3,257,121 13.3
Investment securities 1,366,245 947,688 44.2 1,391,880 940,409 48.0
Noninterest-bearing deposits 607,324 538,990 12.7 585,911 520,694 12.5
Core deposits 3,804,965 3,438,790 10.6 3,773,074 3,331,463 13.3
Total deposits 4,187,972 3,754,925 11.5 4,192,326 3,636,425 15.3
Interest-bearing liabilities 4,469,233 3,750,219 19.2 4,439,967 3,623,422 22.5
Shareholders' equity 402,892 387,476 4.0 407,531 366,035 11.3
PERIOD END BALANCES
Assets 5,631,083 $ 5,111,795 10.2% $ 5,631,083 $ 5,111,795 10.2%
Earning assets 5,172,923 4,700,380 10.1 5,172,923 4,700,380 10.1
Loans 3,829,120 3,593,880 6.5 3,829,120 3,593,880 6.5
Investment securities 1,310,902 1,054,658 24.3 1,310,902 1,054,658 24.3
Noninterest-bearing deposits 645,354 591,391 9.1 645,354 591,391 9.1
Core deposits 3,912,851 3,672,942 6.5 3,912,851 3,672,942 6.5
Total deposits 4,275,276 4,047,291 5.6 4,275,276 4,047,291 5.6
Shareholders' equity 398,874 428,826 (7.0) 398,874 428,826 (7.0)
- ------------------------------------------------------------------------------------------------------------------------------------
bp Change is measured as difference in basis points.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARY
Three Months Ended June 30, Six Months Ended June 30,
------------------------------------- -------------------------------------
(In thousands, except share data) 1996 1995 Change 1996 1995 Change
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
Average primary 23,080,022 23,467,497 (1.7%) 23,257,200 22,885,446 1.6%
Average fully diluted 23,080,022 23,485,648 (1.7) 23,257,200 22,915,030 1.5
Outstanding 22,499,295 24,239,246 (7.2) 22,499,295 24,239,246 (7.2)
COMPOSITION RATIOS*
Earning assets to assets 92.64% 92.18% 46 bp 92.72% 92.72% 45 bp
Loans to earning assets 72.99 77.69 (470) 72.28 77.21 (493)
Interest-bearing liabilities to earning assets 86.88 85.80 108 86.94 85.90 104
Loans to total deposits 89.66 90.44 (78) 88.05 89.57 (152)
Noninterest-bearing deposits to total deposits 14.50 14.35 15 13.98 14.32 (34)
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 54,825 $ 48,013 14.2% $ 53,452 $ 46,701 14.5%
Provision for loan losses 2,325 2,065 12.6 4,325 3,884 11.4
Allowance of acquired financial institutions --- 3,365 (100.0) 0 3,460 (100.0)
Charge-offs (2,141) (1,947) 10.0 (3,425) (3,152) 8.7
Recoveries 1,288 786 63.9 1,945 1,389 40.0
----------------------------------------------------------------------------------------------------------------------------
Net charge-offs (853) (1,161) (26.5) (1,480) (1,763) (16.1)
----------------------------------------------------------------------------------------------------------------------------
Ending balance $ 56,297 $ 52,282 7.7% $ 56,297 $ 52,282 7.7%
============================================================================================================================
Net charge-offs to average loans 0.09% 0.14% (5)bp 0.08% 0.11% (3)bp
============================================================================================================================
COMPOSITION OF RISK ASSETS
Nonaccrual loans $ 18,785 $ 17,119 9.7%
Restructured loans 828 422 96.2
--------------------------------------------------------------------------------------------------------------------------
Nonperforming loans 19,613 17,541 11.8
--------------------------------------------------------------------------------------------------------------------------
Foreclosed property 2,744 3,666 (25.2)
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Nonperforming assets $ 22,357 $ 21,207 5.4%
==========================================================================================================================
ASSET QUALITY RATIOS**
Nonperforming assets to:
Loans and foreclosed property 0.58% 0.59% (1)bp
Total assets 0.40 0.41 (1)
Nonperforming loans to total loans 0.51 0.49 2
Allowance for loan losses to total loans 1.47 1.45 2
Allowance for loan losses to nonperforming loans 2.87x 2.98x (11)
- ------------------------------------------------------------------------------------------------------------------------------------
bp Change is measured as difference in basis points.
*Balance sheet amounts used in calculations are based on average balances.
**Balance sheet amounts used in calculations are based on period end balances.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARY
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- ------------------------------------
As a Percent of As a Percent of
Average Assets# Average Assets#
----------------- ----------------
(Dollars in thousands) 1996 1995 Change 1996 1995 1996 1995 Change 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges on deposit accounts 8,486 $ 6,929 22.5% 0.61% 0.59% $16,330 $13,426 21.6% 0.60% 0.59%
Credit card and related fees 1,043 970 7.5 0.08 0.08 2,109 1,791 17.8 0.08 0.08
Insurance & brokerage commissions 2,913 1,578 84.6 0.21 0.13 5,447 3,181 71.2 0.20 0.14
Other service charges, commissions and fees 1,357 787 72.4 0.10 0.07 2,369 1,597 48.3 0.09 0.07
Fees for trust services 1,645 1,527 7.7 0.12 0.13 3,291 3,054 7.8 0.12 0.13
Mortgage income 2,768 801 245.6 0.20 0.07 6,065 1,929 214.4 0.22 0.09
Negative goodwill amortization 335 335 0.0 0.02 0.03 669 669 0.0 0.02 0.03
Other noninterest income 603 1,566 (61.5) 0.05 0.13 1,208 2,395 (49.6) 0.04 0.11
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest income, excluding securities
transactions 19,150 14,493 32.1 1.39 1.23 37,488 28,042 33.7 1.37 1.24
Securities gains, net 676 (696) (197.1) 0.05 (0.06) 1,279 (621) (306.0) 0.05 (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Total noninterest income 19,826 $ 13,797 43.7% 1.44% 1.17% $38,767 $27,421 41.4% 1.42% 1.21%
====================================================================================================================================
NONINTEREST EXPENSE
Salaries and overtime 19,716 $ 16,701 18.1% 1.43% 1.41% $38,791 $32,204 20.5% 1.42% 1.42%
Fringe benefits and other personnel costs 4,937 4,386 12.6 0.36 0.37 9,967 8,546 16.6 0.36 0.38
Occupancy 2,924 2,682 9.0 0.21 0.23 5,834 5,330 9.5 0.21 0.24
Equipment 5,057 2,990 69.1 0.37 0.25 9,436 5,522 70.9 0.34 0.24
Foreclosed real estate losses and related
operating expense 171 73 134.3 0.01 0.01 309 192 60.9 0.01 0.01
Marketing 1,379 1,503 (8.3) 0.10 0.13 3,035 2,991 1.5 0.11 0.13
Professional fees 2,902 1,824 59.1 0.21 0.15 5,671 3,929 44.3 0.21 0.17
Other administrative 509 1,905 (73.3) 0.04 0.16 2,310 3,579 (35.5) 0.08 0.16
FDIC insurance 795 1,965 (59.5) 0.06 0.17 1,716 3,923 (56.3) 0.06 0.17
Deposit intangible and goodwill amortization 1,139 953 19.5 0.08 0.08 2,340 1,682 39.1 0.09 0.07
Office supplies, postage and telephone 3,886 2,867 35.5 0.28 0.24 7,602 5,743 32.4 0.28 0.25
Other operating 6,335 3,577 77.1 0.45 0.30 10,497 6,883 52.5 0.39 0.31
- ------------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 49,750 $ 41,426 20.1% 3.60% 3.50% $97,508 $80,524 21.1% 3.56% 3.55%
====================================================================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin + 34.74% 35.49% (75)bp 34.90% 36.31% (141)bp
Efficiency ratio*** 62.35% 61.44% 91 bp 62.33% 60.76% 157 bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.25% 9.48% (23)bp 9.31% 9.40 (9)bp
Taxable securities 6.43 6.53 (10) 6.42 6.35 7
Tax-exempt securities 9.21 8.46 75 9.19 8.82 37
Short-term investments 5.26 7.03 -177 5.30 6.67 (137)
- --------------------------------------------------------------------------------------------------------------------
Interest-earning assets 8.50 8.84 -34 8.53 8.73 (20)
- --------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 4.29 4.42 -13 4.39 4.17 22
Borrowed funds 5.19 5.99 -80 5.21 5.86 (65)
Long-term debt 5.73 6.59 -86 5.91 6.47 (56)
- --------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 4.50 4.67 -17 4.58 4.44 14
- --------------------------------------------------------------------------------------------------------------------
Interest rate spread 4.00 4.17 (17) 3.95 4.29 (34)
Net interest margin 4.60 4.84 (24) 4.55 4.93 (38)
=====================================================================================================================
bp Change is measured as difference in basis points.
*** Noninterest expense divided by sum of taxable equivalent net interest
income plus noninterest income.
+ Sum of income before taxes plus the taxable equivalent adjustment
divided by the sum of taxable equivalent
net interest income plus noninterest income.
# Data presented is annualized.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARY
1996 1995 2nd Qtr 96
---------------------------- ----------------------------------------
Second First Fourth Third Second vs.
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter 1st Qtr 96
- ------------------------------------------------------------------------- ------------------------------------------ -------------
FINANCIAL SUMMARY *
Assets $ 5,552,455 $5,463,790 $ 5,321,490 $ 5,190,130 $ 4,742,000 1.6%
Earning assets 5,144,066 5,069,863 4,916,525 4,790,767 4,371,028 1.5
Loans 3,754,884 3,627,847 3,683,152 3,637,859 3,395,950 3.5
Investment securities 1,366,245 1,417,516 1,207,431 1,120,665 947,688 (3.6)
Total deposits 4,187,972 4,196,681 4,198,551 4,111,742 3,754,925 (0.2)
Interest-bearing liabilities 4,469,233 4,410,702 4,249,504 4,119,161 3,750,219 1.3
Stockholders' equity 402,892 412,170 417,338 423,515 387,476 (2.3)
Total market capitalization (period end) 826,849 840,658 812,308 790,698 675,669 (1.6)
Net income 16,456 15,968 14,735 15,940 14,452 3.1
PROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating profit margin + 34.74 35.07% 31.89% 36.55% 35.49% (33)bp
Efficiency ratio *** 62.35 62.32 65.53 60.81 61.44 3
Net interest margin # 4.60 4.50 4.58 4.60 4.84 10
Return on average assets # 1.19 1.18 1.10 1.22 1.22 1
Return on average equity # 16.43 15.58 14.01 14.93 14.96 85
Equity to assets (average) 7.26 7.54 7.84 8.16 8.17 (28)
PER SHARE SUMMARY
Earnings per share - primary $ 0.71 $ 0.68 0.62 $ 0.65 0.62 4.4%
Earnings per share - fully diluted 0.71 0.68 0.62 0.65 0.62 4.4
Cash dividends paid 0.25 0.25 0.23 0.23 0.20 0.0
Book value per share 17.73 17.93 17.69 17.85 17.69 (1.1)
Closing market price 36.750 36.750 35.125 33.250 27.875 0.0
KEY INTANGIBLE ASSETS **
Goodwill $ 50,599 $ 51,584 $ 52,590 $ 53,441 $ 54,457 (1.9%)
Deposit base premium 1,981 2,106 2,230 2,384 2,538 (5.9)
Capitalized excess servicing 6,905 6,543 6,367 5,875 5,088 5.5
Capitalized mortgage servicing rights 10,209 9,579 8,021 5,063 3,474 6.6
ASSET QUALITY SUMMARY **
Nonperforming assets $ 22,357 $ 21,055 $ 22,083 $ 20,370 $ 21,207 6.2%
Allowance for loan losses 56,297 54,825 53,452 53,415 52,282 2.7
Nonperforming assets to total assets 0.40% 0.38% 0.40% 0.39% 0.41% 2 bp
Allowance for loan losses to loans 1.47 1.49 1.44 1.45 1.45 (2)
Net charge-offs to average loans # 0.09 0.07 0.20 0.08 0.14 2
====================================================================================================================================
bp Change is measured as difference in basis points.
* Balance sheet amounts are based on average balances unless otherwise
noted.
** Balance sheet amounts are based on period end balances unless
otherwise noted.
*** Noninterest expense divided by sum of noninterest income plus net interest
income, taxable equivalent basis.
+ Sum of income before taxes plus the taxable equivalent adjustment divided
by the sum of taxable equivalent net interest income plus noninterest
income.
# Data presented is annualized.