Integration of Triangle Bancorp on Track, Expense Reductions Ahead of Schedule
ROCKY MOUNT, N.C., April 14 /PRNewswire/ -- Centura Banks Inc. (NYSE: CBC)
today announced first-quarter 2000 earnings of $36.0 million, or $0.90 per
diluted share before merger-related charges related to the merger with
Triangle Bancorp Inc., which was completed February 18, 2000. Earnings
included a $5.5 million gain on the required sale of branches related to the
Triangle acquisition, which was approximately equal to the reduction in net
interest income from Triangle's investment portfolio. Centura is currently
restructuring this investment portfolio to eliminate its negative effect on
future period earnings. Net income totaled $8.0 million, or $0.20 per diluted
share, after pre-tax merger-related charges of $39.4 million.
Earnings for the period ended March 31, 2000 compared with net income of
$0.80 per diluted share before merger-related items for the same quarter a
year ago and $0.89 for the fourth quarter of 1999. Results for 1999 have been
restated to include combined results of Centura and Triangle.
"Financially, we expected this to be a messy quarter due to a number of
merger-related charges that make meaningful comparisons difficult," said Cecil
W. Sewell, chief executive officer. "The points to take away from all this,
however, are that we are ahead of plan for a 55 percent reduction in overall
costs related to the acquisition, and that we are on target to begin showing
more meaningful comparisons in terms of household retention and revenue growth
as the second quarter progresses."
"During the second quarter, we expect to incur an additional $10 million
to $20 million in merger-related charges," Sewell said. "This means we
anticipate meeting or beating our original projections of $60 million in
charges associated with the merger."
First-quarter merger-related charges of $39.4 million included $15.1
million in losses related to the sales of certain investment securities
incurred as a result of restructuring the investment portfolio acquired with
Triangle. "These portfolio losses had the effect of compressing Centura's net
interest margin in the first quarter," Sewell noted. "We expect our net
interest margin to return to more normal levels in the second quarter as we
complete the process of restructuring the portfolio through the repositioning
of certain securities. We expect this process to be completed by mid-second
quarter."
The net interest margin for the first quarter of 2000 was 4.07 percent
versus 4.17 percent for the comparable prior year quarter and 4.20 percent for
the fourth quarter of 1999. The impact of the Triangle investment portfolio
on the first-quarter margin was approximately 8 to 10 basis points.
At March 31, 2000, nonperforming assets totaled $37.2 million,
representing 0.49 percent of total loans and foreclosed properties. This
compared with $35.8 million and 0.48 percent, respectively, at December 31,
1999, and $48.5 million and 0.68 percent, respectively, for March 31, 1999.
During the first quarter, Centura added approximately $3.2 million of Triangle
loans to nonaccrual in order to adopt Centura's internal loan policies.
Commenting on second-quarter initiatives, Michael S. Patterson, chairman,
said: "Centura's goal in the second quarter is customer retention. We not
only want to retain and grow our relationship with the 66,000 new households
added through the Triangle acquisition, but with customers in every town and
city where we do business. Because of our unique customer-information
database, Centura is well positioned to identify each customer's financial
needs and use our wide array of products and services to offer an appropriate
financial solution that makes a difference."
About Centura
With assets of more than $11 billion and deposits exceeding $7 billion,
Centura Banks Inc. 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 255 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 Web site at http://www.centura.com.
This press release may contain various forward-looking statements. These
forward-looking statements involve risks and uncertainties and actual results
could differ from those described. A discussion of the various factors,
including factors beyond Centura's control, that could cause Centura's actual
results to differ materially from those expressed in such forward-looking
statements is included in Centura's filings with the Securities and Exchange
Commission.
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
(Dollars in thousands,
except per share data) 2000 1999 Change
EARNINGS
Interest income $215,432 $195,196 10.4 %
Interest expense 110,624 93,910 17.8
Net interest income 104,808 101,286 3.5
Provision for loan losses 5,975 7,581 (21.2)
Noninterest income 28,269 42,694 (33.8)
Noninterest expense 110,642 94,450 17.1
Income taxes 8,425 14,770 (43.0)
Net income $8,035 $27,179 (70.4) %
Net interest income,
taxable equivalent $107,738 $104,090 3.5 %
PER COMMON SHARE
Earnings per share - basic $0.20 $0.68 (70.6) %
Earnings per share - diluted 0.20 0.67 (70.1)
Cash dividends paid 0.32 0.25 28.0
Book value per share 21.72 21.62 0.5
Closing market price 45.813 58.188 (21.3)
SELECTED FINANCIAL DATA (A)
Earnings per share - diluted 0.90 0.80 12.5 %
Return on average assets 1.28 1.22 6 bp
Return on average equity 16.81 15.39 142
FINANCIAL RATIOS
Return on average assets 0.29 % 1.01 % (72) bp
Return on average equity 3.76 12.83 (907)
Average equity to average assets 7.59 7.90 (31)
AVERAGE BALANCES
Assets $11,333,016 $10,867,921 4.3 %
Earning assets 10,408,008 9,956,354 4.5
Loans 7,547,933 7,251,050 4.1
Investment securities 2,774,077 2,660,714 4.3
Noninterest-bearing deposits 1,105,151 1,117,106 (1.1)
Core deposits 6,975,082 6,858,689 1.7
Total deposits 7,819,217 7,635,382 2.4
Interest-bearing liabilities 9,256,578 8,732,898 6.0
Shareholders' equity 860,095 859,055 0.1
PERIOD END BALANCES
Assets $11,206,613 $10,868,485 3.1 %
Earning assets 10,256,509 9,923,680 3.4
Loans 7,594,907 7,245,615 4.8
Investment securities 2,607,341 2,639,865 (1.2)
Noninterest-bearing deposits 1,174,585 1,154,915 1.7
Core deposits 6,956,145 6,935,133 0.3
Total deposits 7,752,991 7,735,672 0.2
Shareholders' equity 861,381 860,716 0.1
SELECTED BALANCES EXCLUDING DIVESTITURES (B)
Assets 11,252,182 10,723,558 4.9 %
Loans 7,477,297 7,118,845 5.0
Deposits 7,579,705 7,312,895 3.6
bp- Change is measured as difference in basis points.
(A) Calculation excludes $39.4 million of merger-related charges for 2000.
Included in the merger-related 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. 1999 excludes $8.4 million of merger-related items.
(B) Excludes average balances related to offices divested on February 18,
2000 and offices to be divested in April 2000.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle Bancorp, Inc. which was accounted for as a pooling-
of-interests.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
(Dollars in thousands) 2000 1999 Change
SHARES OUTSTANDING
Average basic 39,598,371 39,799,866 (0.5) %
Average diluted 39,926,443 40,575,764 (1.6)
Outstanding at period end 39,662,141 39,819,661 (0.4)
COMPOSITION RATIOS (A)
Earning assets to total assets 91.84 % 91.61 % 23 bp
Loans to earning assets 72.52 72.83 (31)
Interest-bearing liabilities
to earning assets 88.94 87.71 123
Loans to total deposits 96.53 94.97 156
Noninterest-bearing
deposits to total deposits 14.13 14.63 (50)
ALLOWANCE FOR LOAN LOSSES (AFLL)
Beginning balance $95,500 $91,894 3.9 %
Provision for loan losses 5,975 7,581 (21.2)
Allowance of acquired
financial institutions -- 605 --
Charge-offs (6,515) (7,226) (9.8)
Recoveries 2,490 967 157.5
Net charge-offs (4,025) (6,259) (35.7)
Ending balance $97,450 $93,821 3.9 %
Net charge-offs
to average loans(C) 0.22 % 0.36 % (14) bp
COMPOSITION OF RISK ASSETS
Nonperforming loans $32,372 $41,071 (21.2) %
Foreclosed property 4,789 7,473 (35.9)
Nonperforming assets $37,161 $48,544 (23.4) %
ASSET QUALITY RATIOS (D)
Nonperforming assets to:
Loans and foreclosed property(B) 0.49 % 0.68 % (19) bp
Total assets 0.33 0.45 (12)
Nonperforming loans
to total loans(B) 0.43 0.58 (15)
Allowance for loan
losses to total loans(B) 1.29 1.31 (2)
Allowance for loan
losses to nonperforming loans 3.01 x 2.28 x 73
bp- Change is measured as difference in basis points.
(A) Balance sheet amounts used in calculations are based on average
balances.
(B) Excludes mortgage loans held-for-sale of $29.0 million and
$109.5 million at March 31, 2000 and 1999, respectively.
(C) Excludes mortgage loans held-for-sale, on average, of $67.9 million
and $127.7 million for the three months ended March 31, 2000 and
1999, respectively.
(D) Balance sheet amounts used in calculations are based on period end
balances.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle Bancorp, Inc. which was accounted for as a pooling-
of-interests.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
As a Percent of
Average Assets(A)
(Dollars in thousands) 2000 1999 Change 2000 1999
NONINTEREST INCOME
Service charges on
deposit accounts $15,355 $14,994 2.4 % 0.55 % 0.56 %
Credit card and
related fees 2,071 1,924 7.6 0.07 0.07
Insurance and brokerage
commissions 7,167 6,301 13.7 0.25 0.24
Other service charges,
commissions and fees 3,645 3,088 18.0 0.13 0.12
Fees for trust services 2,751 2,439 12.8 0.10 0.09
Mortgage income 3,705 7,751 (52.2) 0.13 0.29
Negative goodwill
amortization 334 334 -- 0.01 0.01
Operating lease income,
net 699 1,814 (61.5) 0.03 0.07
Other noninterest income 7,397 3,274 125.9 0.26 0.11
Noninterest income,
excluding securities
transactions 43,124 41,919 2.9 1.53 1.56
Securities gains
(losses), net (14,855) 775 (2,016.8) (0.53) 0.03
Total noninterest
income $28,269 $42,694 (33.8)% 1.00 % 1.59 %
NONINTEREST EXPENSE
Salaries and overtime $35,618 $36,145 (1.5)% 1.26 % 1.35 %
Fringe benefits and
other personnel costs 8,148 8,381 (2.8) 0.29 0.31
Occupancy 6,453 6,315 2.2 0.23 0.24
Equipment 6,148 6,787 (9.4) 0.22 0.25
Foreclosed real estate
losses and related
operating expense 662 437 51.5 0.02 0.02
Marketing 1,479 2,297 (35.6) 0.05 0.09
Fees for outsourced
services 4,369 3,959 10.4 0.16 0.15
Professional and
legal fees 3,084 3,495 (11.8) 0.11 0.13
Other administrative 2,970 2,798 6.2 0.11 0.10
FDIC insurance 438 411 6.6 0.02 0.02
Deposit intangible and
goodwill amortization 3,153 3,350 (5.9) 0.11 0.13
Office supplies, postage
and telephone 6,373 5,986 6.5 0.23 0.22
Merger-related expenses 24,338 6,858 254.9 0.86 0.26
Other operating 7,409 7,231 (2.5) 0.27 0.26
Total noninterest
expense $110,642 $94,450 17.1 % 3.93 % 3.52 %
OTHER PERFORMANCE RATIOS
Pretax operating profit
margin (B)(D) 38.83 % 36.18 % 265 bp
Efficiency ratio (C)(D) 57.12 % 59.67 % (255)bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 8.94 % 8.62 % 32 bp
Taxable securities 6.63 6.24 39
Tax-exempt securities 7.75 8.02 (27)
Short-term investments 5.18 5.46 (28)
Interest-earning assets 8.29 7.99 30
Total interest-bearing
deposits 4.39 4.07 32
Borrowed funds 5.68 4.86 82
Long-term debt 6.06 5.68 38
Total interest-bearing
liabilities 4.78 4.34 44
Interest rate spread 3.51 3.65 (14)
Net interest margin 4.07 4.17 (10)
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 sum of taxable equivalent net interest
income plus noninterest income.
(D) Calculation excludes merger-related expenses.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle Bancorp, Inc. which was accounted for as a pooling-
of-interests.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARIES
(Dollars in thousands, except
per share data)
2000 1999
First Fourth Third
Quarter Quarter Quarter
FINANCIAL SUMMARY (A)
Assets $ 11,333,016 $ 11,244,033 $ 11,065,694
Earning assets 10,408,008 10,311,262 10,164,652
Loans 7,547,933 7,437,430 7,390,172
Investment
securities 2,774,077 2,820,815 2,722,460
Total deposits 7,819,217 7,864,788 7,770,777
Interest-bearing
liabilities 9,256,578 9,066,703 8,897,333
Shareholders' equity 860,095 861,593 869,562
Total market
capitalization (period
end) 1,817,042 1,742,779 1,649,174
Net income 8,035 35,549 31,953
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating
profit margin(B) 38.83 % 38.07 % 33.11 %
Efficiency ratio(B) 57.12 55.94 56.65
Net interest margin 4.07 4.20 4.27
Return on average assets 0.29 1.25 1.15
Return on average equity 3.76 16.37 14.58
Average equity to
average assets 7.59 7.66 7.86
PER SHARE SUMMARY
Earnings per share
- basic $0.20 $0.90 $0.80
Earnings per share
- diluted 0.20 0.89 0.79
Cash dividends paid 0.32 0.30 0.29
Book value per share 21.72 21.77 21.74
Closing market price 45.813 44.125 41.375
KEY INTANGIBLE ASSETS (C)
Goodwill $131,514 $134,851 $138,334
Mortgage servicing
rights 35,076 35,916 36,979
ASSET QUALITY SUMMARY(C)
Nonperforming assets $37,161 $35,836 $46,871
Allowance for loan
losses 97,450 95,280 93,701
Nonperforming assets
to total assets 0.33 % 0.31 % 0.42 %
Allowance for loan
losses to total
loans(D) 1.29 1.28 1.28
Net charge-offs to
average loans (D) 0.22 0.39 0.98
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 expenses.
(C) Balance sheet amounts are based on period end balances unless otherwise
noted.
(D) Excludes mortgage loans held-for-sale.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle Bancorp, Inc. which was accounted for as a pooling-
of-interests.
(Dollars in thousands, except per share data)
1999
1st Qtr 00
Second First vs.
Quarter Quarter 4th Qtr 99
FINANCIAL SUMMARY (A)
Assets $10,972,828 $10,867,921 0.8 %
Earning
assets 10,054,104 9,956,354 0.9
Loans 7,344,293 7,251,050 1.5
Investment
securities 2,671,440 2,660,714 (1.7)
Total deposits 7,717,245 7,635,382 (0.6)
Interest-bearing
liabilities 8,799,616 8,732,898 2.1
Shareholders'
equity 865,538 859,055 (0.2)
Total market
capitalization (period
end) 2,241,137 2,317,007 4.3
Net income 35,656 27,179 (77.4)
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating
profit margin(B) 37.09 % 36.18 % 76 bp
Efficiency ratio(B) 57.36 59.67 119
Net interest margin 4.22 4.17 (13)
Return on average assets 1.30 1.01 (96)
Return on average equity 16.52 12.83 (1,261)
Average equity to
average assets 7.89 7.90 (7)
PER SHARE SUMMARY
Earnings per share
- basic $0.90 $0.68 (77.8) %
Earnings per share
- diluted 0.88 0.67 (77.5)
Cash dividends paid 0.29 0.25 6.7
Book value per share 21.44 21.62 (0.2)
Closing market price 56.375 58.188 3.8
KEY INTANGIBLE ASSETS (C)
Goodwill $141,332 $143,702 (2.5) %
Mortgage servicing
rights 42,993 40,482 (2.3)
ASSET QUALITY SUMMARY(C)
Nonperforming assets $65,219 $48,544 3.7 %
Allowance for loan
losses 96,125 93,821 2.3
Nonperforming assets
to total assets 0.59 % 0.45 % 2 bp
Allowance for loan
losses to total
loans(D) 1.32 1.31 1
Net charge-offs to
average loans (D) 0.33 0.36 (17)
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 expenses.
(C) Balance sheet amounts are based on period end balances unless otherwise
noted.
(D) Excludes mortgage loans held-for-sale.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle Bancorp, Inc. which was accounted for as a pooling-
of-interests.
SOURCE Centura Banks, Inc.
 back to top
Company News
On-Call:http://www.prnewswire.com/comp/870954.html or
fax, 800-758-5804, ext. 870954
Related links:
http://www.centura.com
CONTACT:
Steven J. Goldstein, Chief Financial Officer
of Centura Banks, Inc., 252-454-8356, or sgoldstein@centura.com
|
