ROCKY MOUNT, N.C., April 12 /PRNewswire/ -- 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 Centura's board of directors officially rescinded the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 http://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
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
Net income $35,521 $8,035 342.1 %
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 % 93 bp
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,
(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 % 1 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)
Net charge-offs (6,740) (4,025) 67.5
Ending balance $104,705 $97,450 7.4 %
Net charge-offs to average loans 0.35 % 0.22 % 13 bp
COMPOSITION OF RISK ASSETS
Nonperforming loans (C) $51,301 $32,372 58.5 %
Foreclosed property 7,240 4,789 51.2
Nonperforming assets $58,541 $37,161 57.5 %
Loans 90+ days past due,
still accruing $18,451 $11,887 55.2 %
ASSET QUALITY RATIOS (B) (C)
Nonperforming assets (NPAs) to:
Loans and foreclosed property 0.75 % 0.49 % 26 bp
Total assets 0.49 0.33 16
Nonperforming loans (NPLs) 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 2.04 x 3.01 x (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 NPLs classified as held for accelerated
disposition at March 31, 2001.
Including these NPLs, NPAs to loans and foreclosed property were
0.81%, NPAs to total assets were 0.53%, NPLs to total loans were
0.72%, and the AFLL to NPLs was 1.88x.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
As a Percent of
Average Assets (A)
(Dollars in 2001 2000 Change 2001 2000
thousands)
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
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)
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
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
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 % 10 bp
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)
Interest-earning
assets 8.53 8.29 24
Total interest-bearing
deposits 4.72 4.39 33
Borrowed funds 5.42 5.68 (26)
Long-term debt 6.17 6.06 11
Total interest-bearing
liabilities 5.70 4.78 92
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
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
(Dollars in thousands,
except per share data)
FINANCIAL SUMMARY (A)
Assets $11,764,869 $11,405,683 $11,261,701 $11,087,991 $11,333,016
Earning
assets,
net 10,805,374 10,466,489 10,323,647 10,161,950 10,408,008
Loans,
gross 7,721,247 7,713,182 7,631,191 7,604,252 7,481,313
Investment
securities,
net 2,981,039 2,655,105 2,599,384 2,456,812 2,774,077
Total
deposits 7,484,106 7,655,687 7,584,598 7,581,910 7,819,217
Interest-
bearing
liabili-
ties 9,528,849 9,225,498 9,114,564 8,974,603 9,256,578
Shareholders'
equity 984,483 926,344 902,196 869,319 860,095
Total market
capitalization
(period
end) 1,959,862 1,902,355 1,527,838 1,353,339 1,817,042
Net
income 35,521 35,794 34,003 20,923 8,035
Full-time
equivalents 3,327 3,379 3,443 3,450 3,450
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating
profit margin
(B) 36.46% 36.23% 37.10% 31.80% 38.92%
Efficiency
ratio(B) 58.92 59.23 58.16 60.07 57.12
Net interest
margin 4.07 4.14 4.06 4.10 4.07
Return on average
assets 1.22 1.25 1.20 0.76 0.29
Return on
average
equity 14.63 15.37 15.00 9.68 3.76
Average equity
to average
assets 8.37 8.12 8.01 7.84 7.59
PER SHARE SUMMARY
Earnings per
share -
basic $ 0.90 $ 0.91 $ 0.85 $ 0.53 $ 0.20
Earnings per
share -
diluted 0.89 0.90 0.85 0.52 0.20
Cash dividends
paid 0.34 0.34 0.34 0.34 0.32
Book value per
share 25.00 24.26 23.05 22.09 21.72
Closing market
price 49.450 48.250 38.313 33.953 45.813
KEY INTANGIBLE ASSETS (C)
Goodwill $136,158 $139,928 $143,520 $125,606 $131,514
Mortgage
servicing
rights 6,779 6,517 6,037 31,797 35,076
ASSET QUALITY SUMMARY(C)
Nonperforming assets
(NPAs)(D) $58,541 $54,372 $54,631 $45,929 $37,161
Allowance for
loan
losses 104,705 104,275 104,036 103,271 97,450
Nonperforming
assets to total
assets (D) 0.49 % 0.47 % 0.48 % 0.41 % 0.33 %
Allowance for
loan losses to
total loans 1.35 1.36 1.35 1.35 1.29
Net charge-offs
to average
loans 0.35 0.33 0.32 0.32 0.22
1st Qtr 01
vs.
4th Qtr 00
(Dollars in thousands,
except per share data)
FINANCIAL SUMMARY (A)
Assets 3.1 %
Earning assets, net 3.2
Loans, gross 0.1
Investment securities, net 12.3
Total deposits (2.2)
Interest-bearing liabilities 3.3
Shareholders' equity 6.3
Total market capitalization (period end) 3.0
Net income (0.8)
Full-time equivalents (1.5)
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating profit margin(B) 23 bp
Efficiency ratio(B) (31)
Net interest margin (7)
Return on average assets (2)
Return on average equity (74)
Average equity to average assets 25
PER SHARE SUMMARY
Earnings per share - basic (1.1) %
Earnings per share - diluted (1.1)
Cash dividends paid 5.9
Book value per share 3.1
Closing market price 2.5
KEY INTANGIBLE ASSETS (C)
Goodwill (2.7) %
Mortgage servicing rights 4.0
ASSET QUALITY SUMMARY(C)
Nonperforming assets (NPA's)(D) 7.7 %
Allowance for loan losses 0.4
Nonperforming assets to total assets (D) 2 bp
Allowance for loan losses to total loans (1)
Net charge-offs to average loans 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 (NPLs)
classified as held for accelerated disposition at March 31, 2001 and
December 31, 2000, respectively. Including these NPLs, NPAs to total
assets were 0.53% and 0.51% for the quarters ended March 31, 2001 and
December 31, 2000, respectively.
SOURCE Centura Banks, Inc.
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Related links:
http://www.centura.com
Company News On-Call:
http://www.prnewswire.com/comp/870954.html or fax,
800-758-5804, ext. 870954
CONTACT:
Steven J. Goldstein, Chief Financial Officer,
252-454-8356, or sgoldstein@centura.com , or Terry Earley,
Investor Relations, 252-454-4453, or tearley@centura.com , both
of Centura Banks, Inc.
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