For Immediate Release
October 3, 1996
Contact: Frank L. Pattillo
Chief Financial Officer
(919) 977-8341
fpattillo@centura.com
CENTURA BANKS INC. REPORTS THIRD QUARTER EARNINGS
ROCKY MOUNT, N.C. -- Centura Banks Inc. (NYSE:CBC) announced today that
net income for the third quarter of 1996 increased 8.5 percent over the
comparable period of last year to $17.3 million, or 74 cents per fully diluted
share, excluding the impact of a one-time special assessment.
On Sept. 30, the President enacted legislation requiring a one-time
special assessment on SAIF-insured deposits. This will affect financial
institutions that have or have acquired deposits from thrift institutions over
past years. The special assessment impacts Centura's net income by $4.2 million,
after the effect of income taxes. Net income for the third quarter, after the
special assessment, was $13.0 million compared to $15.9 million for the same
period one year ago, representing fully diluted earnings per share of 56 cents
and 65 cents, respectively.
-more-
CENTURA REPORTS THIRD QUARTER EARNINGS
OCTOBER 3, 1996
PAGE TWO
For the first nine months of 1996, net income, excluding the impact of
the special assessment, would have increased 10.5 percent to $49.7 million, or
$2.13 per fully diluted share. However, after the special assessment, net income
was steady at $45.5 million compared to $45.0 million for the same period of
1995. Fully diluted earnings per share rose to $1.95 from $1.92 during the same
period last year.
The increase in earnings, excluding the special assessment, results
from steady loan demand and continued growth in noninterest income.
"This has been a remarkably productive quarter for us, and the trends
are all heading in the right direction for an outstanding year," said Robert R.
Mauldin, Centura's chairman and chief executive officer. "We are continuing to
see growth in securities and insurance, we have made dramatic changes in
features and pricing for checking accounts, credit cards and electronic delivery
channels, and we have begun opening a number of new supermarket offices in
recent weeks."
"One area we have defined for further improvement is efficiency, and we
will be taking steps during the next few months to improve our efficiency ratio
while continuing to make necessary investments in technology, sales and
marketing," Mauldin said.
-more-
CENTURA REPORTS THIRD QUARTER EARNINGS
OCTOBER 3, 1996
PAGE 3
For the quarter, return on assets was .91 percent and return on equity
was 12.34 percent. Without the special assessment, quarterly return on assets
would have been 1.20 percent and return on equity would have been 16.36 percent.
Deposits on average increased 8 percent to $4.4 billion. Loans increased 7
percent on average to $3.9 billion, and net charge-offs were .13 percent of
average total loans.
Damage caused by Hurricane Fran, which hit a large number of Centura's
coastal and eastern North Carolina markets in September, had an effect on new
business growth. "Securities and insurance production were especially slowed for
a couple of weeks, although they are already rebounding. Asset quality is not
expected to suffer from the storm," Mauldin said.
During the quarter, Centura completed the acquisition of First
Community Bank of Gastonia, N.C. On Oct. 1, Centura completed the purchase of 49
percent of First Greensboro Home Equity, a multi-state alternative equity lender
based in Greensboro, N.C. Also during the fourth quarter, Centura expects to
complete the acquisition of FirstSouth Bank in Burlington, N.C., and the
acquisition of CLG, Inc., a technology leasing company based in Raleigh, N.C.
-more-
CENTURA REPORTS THIRD QUARTER EARNINGS
OCTOBER 3, 1996
PAGE 4
Centura's net interest margin for the quarter was 4.63 percent, a
slight improvement from the second quarter and consistent with the third quarter
last year.
With assets of $5.9 billion, Centura provides a complete line of
banking, investment, insurance and trust services to individuals and businesses
throughout North Carolina. It provides services through 159 financial centers,
more than 230 ATMs at financial centers, Wal-Mart and Sam's stores, its Centura
Highway telephone banking center, Quicken and Microsoft Money, the leading
personal finance software packages, and America Online, the world's largest
provider of online services. In September, Centura opened the first four of what
will be 33 financial offices in Hannaford supermarkets in the Carolinas and
Virginia by the end of 1997.
For further information on Centura, visit Centura Highway on the World
Wide Web at http://www.centura.com.
###
CENTURA BANKS, INC. AND SUBSIDIARY
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------------------- ---------------------------------
(In thousands, except share and per share data) 1996 1995 Change 1996 1995 Change
- ------------------------------------------------------------------------------------------------------------------------------------
EARNINGS
Interest income $ 112,874 $ 104,878 7.6 % $ 328,789 $ 287,282 14.4%
Interest expense 51,753 50,150 3.2 152,982 129,917 17.8
----------------------------------------------------------------------------------------------------------------------------
Net interest income 61,121 54,728 11.7 175,807 157,365 11.7
Provision for loan losses 2,325 1,902 22.2 6,650 5,786 14.9
Noninterest income 20,128 16,104 25.0 58,895 43,525 35.3
Noninterest expense 58,706 43,891 33.8 156,214 124,415 25.6
Income taxes 7,173 9,099 (21.2) 26,369 25,710 2.6
----------------------------------------------------------------------------------------------------------------------------
Net income $ 13,045 $ 15,940 (18.2)% $ 45,469 $ 44,979 1.1%
============================================================================================================================
Net interest income, taxable equivalent $ 62,518 $ 56,633 10.4 % $ 180,178 $ 161,736 11.4%
============================================================================================================================
PER COMMON SHARE
Net income-primary $ 0.56 $ 0.65 (13.8)% $ 1.95 $ 1.92 1.6%
Net income-fully diluted 0.56 0.65 (13.8) 1.95 1.92 1.6
Cash dividends paid 0.25 0.23 8.7 0.75 0.62 21.0
Book value 18.50 17.85 3.7 18.50 17.85 3.7
Closing market price 38.625 33.250 16.2 38.625 33.250 16.2
FINANCIAL RATIOS
Return on average assets 0.91% 1.2% (31)bp 1.09% 1.26% (17)bp
Return on average shareholders' equity 12.34 14.93 (259) 14.75 15.60 (85)
Equity to assets (average) 7.35 8.16 (81) 7.38 8.06 (68)
AVERAGE BALANCES
Assets $ 5,721,893 $ 5,190,130 10.2 % $ 5,579,899 $4,779,762 16.7%
Earning assets 5,296,261 4,790,767 10.6 5,170,524 4,411,409 17.2
Loans 3,886,601 3,637,859 6.8 3,756,919 3,385,603 11.0
Investment securities 1,379,907 1,120,665 23.1 1,387,860 1,001,092 38.6
Noninterest-bearing deposits 641,677 576,268 11.4 604,635 539,353 12.1
Core deposits 4,076,085 3,698,456 10.2 3,874,815 3,454,956 12.2
Total deposits 4,429,723 4,111,742 7.7 4,272,036 3,796,148 12.5
Interest-bearing liabilities 4,583,808 4,119,161 11.3 4,488,264 3,790,048 18.4
Shareholders' equity 420,465 423,515 (0.7) 411,874 385,409 6.9
PERIOD END BALANCES
Assets $ 5,924,179 $ 5,256,197 12.7 % $ 5,924,179 $5,256,197 12.7%
Earning assets 5,451,670 4,870,313 11.9 5,451,670 4,870,313 11.9
Loans 3,988,039 3,678,772 8.4 3,988,039 3,678,772 8.4
Investment securities 1,450,923 1,158,005 25.3 1,450,923 1,158,005 25.3
Noninterest-bearing deposits 686,462 577,030 19.0 686,462 577,030 19.0
Core deposits 4,222,943 3,721,902 13.5 4,222,943 3,721,902 13.5
Total deposits 4,562,613 4,169,922 9.4 4,562,613 4,169,922 9.4
Shareholders' equity 431,005 424,379 1.6 431,005 424,379 1.6
- ------------------------------------------------------------------------------------------------------------------------------------
bp Change is measured as difference in basis points.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARY
Three Months Ended September 30, Nine Months Ended September 30,
------------------------------------ ------------------------------------
(In thousands, except share data) 1996 1995 Change 1996 1995 Change
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
Average primary 23,382,902 24,478,272 (4.5)% 23,294,658 23,421,944 (0.5) %
Average fully diluted 23,382,902 24,488,290 (4.5) 23,296,975 23,463,288 (0.7)
Outstanding 23,293,670 23,780,389 (2.0) 23,293,670 23,780,389 (2.0)
COMPOSITION RATIOS*
Earning assets to assets 92.56% 92.31% 25 bp 92.66 % 92.29 % 37 bp
Loans to earning assets 73.38 75.93 (255) 72.66 76.75 (409)
Interest-bearing liabilities to earning
assets 86.55 85.98 57 86.80 85.91 89
Loans to total deposits 87.74 88.47 (73) 87.94 89.19 (125)
Noninterest-bearing deposits to total
deposits 14.49 14.02 47 14.15 14.21 (6)
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 56,297 $ 52,282 7.7 % $ 53,452 $ 46,701 14.5 %
Provision for loan losses 2,325 1,902 22.2 6,650 5,786 14.9
Allowance of acquired financial institutions 1,240 --- --- 1,240 3,460 (64.2)
Charge-offs (1,946) (1,725) 12.8 (5,371) (4,877) 10.1
Recoveries 630 956 (34.1) 2,575 2,345 9.8
---------------------------------------------------------------------------------------------------------------------------------
Net charge-offs (1,316) (769) 71.1 (2,796) (2,532) 10.4
---------------------------------------------------------------------------------------------------------------------------------
Ending balance $ 58,546 $ 53,415 9.6 % $ 58,546 $ 53,415 9.6 %
=================================================================================================================================
Net charge-offs to average loans 0.13% 0.08% 5 bp 0.10 % 0.10 % 0 bp
=================================================================================================================================
COMPOSITION OF RISK ASSETS
Nonaccrual loans $ 16,448 $ 16,863 (2.5)%
Restructured loans 609 331 84.0
---------------------------------------------------------------------------------------------------------------------------------
Nonperforming loans 17,057 17,194 (0.8)
---------------------------------------------------------------------------------------------------------------------------------
Foreclosed property 3,300 3,176 3.9
---------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets $ 20,357 $ 20,370 (0.1)%
=================================================================================================================================
ASSET QUALITY RATIOS**
Nonperforming assets to:
Loans and foreclosed property 0.51 % 0.55 % (4)bp
Total assets 0.34 0.39 (5)
Nonperforming loans to total loans 0.43 0.47 (4)
Allowance for loan losses to total loans 1.47 1.45 2
Allowance for loan losses to nonperforming loans 3.43 x 3.11 x 32
- -----------------------------------------------------------------------------------------------------------------------------------
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 September 30,
-------------------------------------------------
As a Percent of
Average Assets#
------------------
(Dollars in thousands) 1996 1995 Change 1996 1995
- -----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges on deposit accounts $ 8,427 $ 7,350 14.7% 0.59% 0.56%
Credit card and related fees 1,479 1,262 17.2 0.10 0.10
Insurance & brokerage commissions 2,702 1,752 54.2 0.19 0.13
Other service charges, commissions
and fees 1,610 908 77.3 0.11 0.07
Fees for trust services 1,650 1,527 8.1 0.11 0.12
Mortgage income 2,673 2,437 9.7 0.19 0.19
Negative goodwill amortization 334 334 0.0 0.02 0.03
Other noninterest income 850 526 61.6 0.06 0.03
- -----------------------------------------------------------------------------------------------
Noninterest income, excluding securities
transactions 19,725 16,096 22.6 1.37 1.23
Securities gains (losses), net 403 8 4,937.5 0.03 0.00
- -----------------------------------------------------------------------------------------------
Total noninterest income $ 20,128 $ 16,104 25.0% 1.40% 1.23%
===============================================================================================
NONINTEREST EXPENSE
Salaries and overtime $ 20,189 $ 18,118 11.4% 1.40% 1.38%
Fringe benefits and other personnel costs 5,340 4,380 21.9 0.37 0.33
Occupancy 3,102 2,882 7.6 0.22 0.22
Equipment 4,921 4,016 22.5 0.34 0.31
Foreclosed real estate losses and related
operating expense 148 173 (14.5) 0.01 0.01
Marketing 1,657 1,500 10.5 0.12 0.11
Professional fees 3,274 1,915 71.0 0.23 0.15
Other administrative 1,131 1,943 (41.8) 0.08 0.15
FDIC insurance 8,364 497 1,582.9 0.58 0.04
Deposit intangible and goodwill
amortization 1,254 1,169 7.3 0.09 0.09
Office supplies, postage and telephone 3,918 3,406 15.0 0.27 0.26
Other operating 5,408 3,892 39.0 0.37 0.30
- -----------------------------------------------------------------------------------------------
Total noninterest expense $ 58,706 $ 43,891 33.8% 4.08% 3.36%
===============================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin + 26.15% 37.04% (1,089)bp
Efficiency ratio*** 71.03% 60.34% 1,069 bp
Net interest income analysis-taxable
equivalent:
Selected average yields/rates:
Loans 9.25% 9.42% (17)bp
Taxable securities 6.41 6.55 (14)
Tax-exempt securities 9.21 9.78 (57)
Short-term investments 5.55 5.75 (20)
- ------------------------------------------------------------------------------
Interest-earning assets 8.50 8.75 (25)
- -------------------------------------------------------------------------------
Total interest-bearing
deposits 4.36 4.65 (29)
Borrowed funds 5.01 5.79 (78)
Long-term debt 5.33 6.19 (86)
- --------------------------------------------------------------------------------
Total interest-bearing
liabilities 4.49 4.83 (34)
- -------------------------------------------------------------------------------
Interest rate spread 4.01 3.92 9
Net interest margin 4.63 4.60 3
================================================================================
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.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARY
Nine Months Ended September 30,
------------------------------------------------
As a Percent of
Average Assets
-----------------
(Dollars in thousands) 1996 1995 Change 1996 1995
- ----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges on deposit accounts $ 24,757 $ 20,776 19.2% 0.59% 0.58%
Credit card and related fees 3,588 3,053 17.5 0.09 0.09
Insurance & brokerage commissions 8,149 4,933 65.2 0.20 0.14
Other service charges, commissions
and fees 3,979 2,505 58.8 0.10 0.07
Fees for trust services 4,941 4,581 7.9 0.12 0.13
Mortgage income 8,738 4,366 100.1 0.21 0.12
Negative goodwill amortization 1,003 1,003 0.0 0.02 0.03
Other noninterest income 2,058 2,921 (29.5) 0.04 0.08
- --------------------------------------------------------------------------------------------
Noninterest income, excluding securities
transactions 57,213 44,138 29.6 1.37 1.24
Securities gains (losses), net 1,682 (613) (374.4) 0.04 (0.02)
- --------------------------------------------------------------------------------------------
Total noninterest income $ 58,895 $ 43,525 35.3% 1.41% 1.22%
============================================================================================
NONINTEREST EXPENSE
Salaries and overtime $ 58,980 $ 50,322 17.2% 1.41% 1.41%
Fringe benefits and other personnel cost 15,307 12,926 18.4 0.37 0.36
Occupancy 8,936 8,212 8.8 0.21 0.23
Equipment 14,357 9,538 50.5 0.34 0.27
Foreclosed real estate losses and relate
operating expense 457 365 25.2 0.01 0.01
Marketing 4,692 4,491 4.5 0.11 0.13
Professional fees 8,945 5,844 53.1 0.21 0.16
Other administrative 3,441 5,522 (37.7) 0.08 0.15
FDIC insurance 10,080 4,420 128.1 0.24 0.12
Deposit intangible and goodwill
amortization 3,594 2,851 26.1 0.09 0.08
Office supplies, postage and telephone 11,520 9,149 25.9 0.28 0.26
Other operating 15,905 10,775 47.6 0.39 0.31
- --------------------------------------------------------------------------------------------
Total noninterest expense $ 156,214 $ 124,415 25.6% 3.74% 3.48%
==============================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin + 31.88% 36.57% (469)bp
Efficiency ratio*** 65.34% 60.61% 473 bp
Net interest income analysis-taxable
equivalent:
Selected average yields/rates:
Loans 9.29% 9.40% (11)bp
Taxable securities 6.42 6.42 0
Tax-exempt securities 9.19 9.12 7
Short-term investments 5.39 6.27 (88)
- ----------------------------------------------------------------------------
Interest-earning assets 8.52 8.73 (21)
- ----------------------------------------------------------------------------
Total interest-bearing
deposits 4.38 4.35 3
Borrowed funds 5.14 5.83 (69)
Long-term debt 5.72 6.36 (64)
- -----------------------------------------------------------------------------
Total interest-bearing
liabilities 4.55 4.58 -3
- ------------------------------------------------------------------------------
Interest rate spread 3.97 4.15 (18)
Net interest margin 4.57 4.81 (24)
================================================================================
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 3rd Qtr 96
------------------------------------------- -------------------------
Third Second First Fourth Third vs.
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter 2nd Qtr 96
- -------------------------------------------------------------------------------------- ------------------------- --------------
FINANCIAL SUMMARY *
Assets $ 5,721,893 $ 5,552,455 $ 5,463,790 $ 5,321,490 $ 5,190,130 3.1%
Earning assets 5,296,261 5,144,066 5,069,863 4,916,525 4,790,767 3.0
Loans 3,886,601 3,754,884 3,627,847 3,683,152 3,637,859 3.5
Investment securities 1,379,907 1,366,245 1,417,516 1,207,431 1,120,665 1.0
Total deposits 4,429,723 4,187,972 4,196,681 4,198,551 4,111,742 5.8
Interest-bearing liabilities 4,583,808 4,469,233 4,410,702 4,249,504 4,119,161 2.6
Stockholders' equity 420,465 402,892 412,170 417,338 423,515 4.4
Total market capitalization (period end) 899,718 826,849 840,658 812,308 790,698 8.8
Net income 13,045 16,456 15,968 14,735 15,940 (20.7)
PROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating profit margin + 26.15% 34.74% 35.07% 31.89% 36.55% (859)bp
Efficiency ratio *** 71.03 62.35 62.32 65.53 60.81 868
Net interest margin # 4.63 4.60 4.50 4.58 4.60 3
Return on average assets # 0.91 1.19 1.18 1.10 1.22 (28)
Return on average equity # 12.34 16.43 15.58 14.01 14.93 (409)
Equity to assets (average) 7.35 7.26 7.54 7.84 8.16 9
PER SHARE SUMMARY
Earnings per share - primary $ 0.56 $ 0.71 $ 0.68 $ 0.62 $ 0.65 (21.1)%
Earnings per share - fully diluted 0.56 0.71 0.68 0.62 0.65 (21.1)
Cash dividends paid 0.25 0.25 0.25 0.23 0.23 0.0
Book value per share 18.50 17.73 17.93 17.69 17.85 4.4
Closing market price 38.625 36.750 36.750 35.125 33.250 5.1
KEY INTANGIBLE ASSETS **
Goodwill $ 66,348 $ 50,599 $ 51,584 $ 52,590 $ 53,441 31.1%
Deposit base premium 1,856 1,981 2,106 2,230 2,384 (6.3)
Capitalized excess servicing 7,110 6,905 6,543 6,367 5,875 3.0
Capitalized mortgage servicing rights 12,602 10,209 9,579 8,021 5,063 23.4
ASSET QUALITY SUMMARY **
Nonperforming assets $ 20,357 $ 22,357 $ 21,055 $ 22,083 $ 20,370 (8.9)%
Allowance for loan losses 58,546 56,297 54,825 53,452 53,415 4.0
Nonperforming assets to total assets 0.34% 0.40% 0.38% 0.40% 0.39% (6)bp
Allowance for loan losses to loans 1.47 1.47 1.49 1.44 1.45 (0)
Net charge-offs to average loans # 0.13 0.09 0.07 0.20 0.08 4
================================================================================
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.