ROCKY MOUNT, N.C., July 13 /PRNewswire/ -- Centura Banks, Inc. (NYSE: CBC)
today announced second quarter 2000 earnings of $28.7 million, or $0.72 per
diluted share before merger-related and other significant charges. The second
quarter results include $5 million in additional loan loss provisions recorded
in order to align the credit risk management methodologies of Triangle
Bancorp, Inc. with those of Centura.
These results compare with net income of $0.88 per diluted share for the
same period a year ago and $0.90 for the first quarter of 2000. Results for
the year-ago periods have been restated to include combined results of Centura
and Triangle.
After pre-tax merger-related and other significant charges totaling
$11.2 million, net income for the second quarter of 2000 totaled
$20.9 million, or $0.52 per diluted share. The $11.2 million in charges
included $1.7 million resulting from the Hannaford store closings and
$7.1 million related to the sales of certain investment securities incurred as
a result of completing the restructuring of the Triangle investment portfolio.
"Our disappointing performance in the second quarter was largely the
result of pressures on the net interest margin brought about by higher
interest rates and the slowing economy," said Cecil W. Sewell, chief executive
officer. "Although this economic condition impacts our entire industry, its
effect has been magnified on Centura due to the timing of our acquisition of
Triangle. The acquisition has progressed according to plan in terms of
reduced expenses and customer-retention goals, but we experienced additional
margin pressures in the second quarter as we both absorbed Triangle's
portfolio and sacrificed some retail pricing to our overriding priority of
customer retention. Retaining our high-value customers remains a top priority
at Centura because it represents the best long-term strategy for building
lasting relationships, reducing the need for wholesale funding, and
strengthening the net interest margin."
Including merger-related and other significant charges totaling
$50.7 million, net income was $29.0 million or $0.72 per diluted share for the
six months ending June 30, 2000. This compares to net income of $62.8 million
or $1.55 per diluted share for the first six months of 1999.
At June 30, 2000, nonperforming assets totaled $45.9 million, representing
0.60% of total loans and foreclosed properties, consistent with the level each
of the last four years of approximately 0.55% to 0.65%.
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 250 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
(Dollars in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2000 1999 Change 2000 1999 Change
EARNINGS
Interest
income $ 217,718 $ 197,851 10.0% $ 433,150 $ 393,047 10.2%
Interest
expense 114,202 94,061 21.4 224,826 187,971 19.6
Net interest
income 103,516 103,790 (0.3) 208,324 205,076 1.6
Provision for
loan losses 11,920 8,347 42.8 17,895 15,928 12.3
Noninterest
income 33,903 43,812 (22.6) 62,172 86,506 (28.1)
Noninterest
expense 92,274 86,402 6.8 202,916 180,852 12.2
Income
taxes 12,302 17,197 (28.5) 20,727 31,967 (35.2)
Net
income $ 20,923 $ 35,656 (41.3)% $ 28,958 $ 62,835 (53.9)%
Net interest
income, taxable
equiva-
lent $ 105,686 $ 106,810 (1.1)% $ 213,424 $ 210,900 1.2 %
PER COMMON SHARE
Earnings per
share -
basic $ 0.53 $ 0.90 (41.1)% $ 0.73 $ 1.58 (53.8)%
Earnings per
share -
diluted 0.52 0.88 (40.9) 0.72 1.55 (53.5)
Cash dividends
paid 0.34 0.29 17.2 0.66 0.54 22.2
Book value per
share 22.09 21.44 3.0 22.09 21.44 3.0
Closing market
price 33.953 56.375 (39.8) 33.953 56.375 (39.8)
SELECTED FINANCIAL
DATA (A)
Earnings per
share -
diluted $ 0.72 $ 0.88 (18.2)% $ 1.62 $ 1.72 (5.8)%
Return on
average
assets 1.04 1.30 (26)bp 1.16 1.29 (13)bp
Return on
average
equity 13.28 16.52 (324) 15.04 16.28 (124)
FINANCIAL RATIOS
Return on average
assets 0.76% 1.30% (54)bp 0.52% 1.16% (64)bp
Return on
average
equity 9.68 16.52 (684) 6.73 14.69 (796)
Average equity
to average
assets 7.84 7.89 (5) 7.71 7.90 (19)
AVERAGE BALANCES
Assets $11,087,991 $10,972,828 1.0% $11,210,504 $10,920,665 2.7%
Earning
assets,
net 10,161,950 10,054,104 1.1 10,284,979 10,005,499 2.8
Loans,
gross 7,604,252 7,231,015 5.2 7,542,782 7,177,489 5.1
Investment
securities,
net 2,456,812 2,671,440 (8.0) 2,615,445 2,666,107 (1.9)
Noninterest-
bearing
deposits 1,130,684 1,152,537 (1.9) 1,117,918 1,134,919 (1.5)
Core
deposits 6,798,340 6,897,408 (1.4) 6,886,711 6,878,155 0.1
Total
deposits 7,581,910 7,717,245 (1.8) 7,700,563 7,676,540 0.3
Interest-
bearing
liabil-
ities 8,974,603 8,799,616 2.0 9,115,591 8,766,443 4.0
Shareholders'
equity 869,319 865,538 0.4 864,707 862,315 0.3
PERIOD END BALANCES
Assets $11,338,832 $11,042,086 2.7% $11,338,832 $11,042,086 2.7%
Earning
assets,
net 10,366,538 10,118,726 2.4 10,366,538 10,118,726 2.4
Loans,
gross 7,656,212 7,266,983 5.4 7,656,212 7,266,983 5.4
Investment
securities,
net 2,590,230 2,724,084 (4.9) 2,590,230 2,724,084 (4.9)
Noninterest-
bearing
deposits 1,195,965 1,220,468 (2.0) 1,195,965 1,220,468 (2.0)
Core
deposits 6,972,050 6,894,351 1.1 6,972,050 6,894,351 1.1
Total
deposits 7,748,104 7,785,416 (0.5) 7,748,104 7,785,416 (0.5)
Shareholders'
equity 880,509 852,437 3.3 880,509 852,437 3.3
SELECTED BALANCES
EXCLUDING
DIVESTITURES (B)
Assets $11,080,175 $10,828,465 2.3% $11,163,869 $10,776,302 3.6%
Loans 7,597,238 7,098,810 7.0 7,502,030 7,045,284 6.5
Deposits 7,559,841 7,394,758 2.2 7,562,383 7,354,053 2.8
bp- Change is measured as difference in basis points.
(A) Calculation excludes $11.2 million and $50.7 million of pre-tax
merger-related and other significant charges incurred for the three
and six months ended June 30, 2000, respectively. Included in these
charges are $22.1 million in losses related to sales of certain
investment securities incurred as a result of restructuring the
investment portfolio acquired with the Triangle merger, of which
$15.1 million and $7.1 million were incurred during the first quarter
and second quarter 2000, respectively. 1999 excludes $8.4 million of
pre-tax merger-related items, all of which were incurred during the
first quarter.
(B) Excludes average balances related to divested banking locations as a
result of the merger with Triangle Bancorp, Inc. Divestitures were
completed in April, 2000.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle which was accounted for as a pooling-of-
interests.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
(Dollars in thousands)
Three Months Ended June 30, Six Months Ended June 30,
2000 1999 Change 2000 1999 Change
SHARES OUTSTANDING
Average
basic 39,784,411 39,768,801 -- % 39,691,391 39,784,247 (0.2) %
Average
diluted 40,096,213 40,451,069 (0.9) 40,011,875 40,515,759 (1.2)
Outstanding at
period
end 39,859,195 39,754,091 0.3 39,859,195 39,754,091 0.3
COMPOSITION RATIOS (A)
Earning assets to
total
assets 91.65% 91.63% 2 bp 91.74% 91.62% 12 bp
Loans to earning
assets 74.83 71.92 291 73.34 71.74 160
Interest-bearing liabilities
to earning
assets 88.32 87.52 80 88.63 87.62 101
Loans to total
deposits 100.29 93.70 659 97.95 93.50 445
Noninterest-bearing
deposits to total
deposits 14.91 14.93 (2) 14.52 14.78 (26)
ALLOWANCE FOR LOAN LOSSES (AFLL)
Beginning
balance $97,450 $93,821 3.9 % $95,500 $91,894 3.9 %
AFLL related to
loans sold -- (100) (100) -- (100) (100)
Provision for
loan losses 11,920 8,347 42.8 17,895 15,928 12.3
Allowance of acquired
financial
institutions -- -- -- -- 605 (100.0)
Charge-offs (7,450) (6,782) 9.8 (13,965) (14,008) (0.3)
Recoveries 1,351 839 61.0 3,841 1,806 112.7
Net
charge-offs (6,099) (5,943) 2.6 (10,124) (12,202)(17.0)
Ending
balance $103,271 $96,125 7.4 % $103,271 $96,125 7.4 %
Net charge-offs to
average
loans 0.32 % 0.33 % (1) bp 0.27 % 0.34 % (7)bp
COMPOSITION OF RISK ASSETS
Nonperforming
loans $41,286 $59,573 (30.7) %
Foreclosed property 4,643 5,646 (17.8)
Nonperforming assets $45,929 $65,219 (29.6) %
ASSET QUALITY RATIOS (B)
Nonperforming assets to:
Loans and foreclosed property 0.60% 0.90% (30)bp
Total assets 0.41 0.59 (18)
Nonperforming loans to total loans 0.54 0.82 (28)
Allowance for loan losses to total loans 1.35 1.32 3
Allowance for loan losses to nonperforming
loans 2.50 x 1.61 x 89
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.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle which was accounted for as a pooling-of-interests.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended June 30,
As a Percent of
Average Assets (A)
(Dollars in
thousands) 2000 1999 Change 2000 1999
NONINTEREST INCOME
Service charges on deposit
accounts $ 15,993 $ 15,930 0.4 % 0.58 % 0.58 %
Credit card and
related fees 2,050 1,933 6.1 0.07 0.07
Insurance and
brokerage
commissions 5,851 6,147 (4.8) 0.21 0.22
Other service charges,
commissions and
fees 3,274 3,678 (11.0) 0.12 0.13
Fees for trust
services 2,758 2,743 0.6 0.10 0.10
Mortgage income 5,543 6,351 (12.7) 0.20 0.23
Negative goodwill
amortization 335 335 -- 0.01 0.01
Operating lease
income, net 623 1,814 (65.7) 0.02 0.07
Other noninterest
income 6,426 4,646 38.3 0.24 0.18
Noninterest income,
excluding securities
transactions 42,853 43,577 (1.7) 1.55 1.59
Securities gains
(losses), net (8,950) 235 NM (0.32) 0.01
Total noninterest
income $ 33,903 $ 43,812 (22.6) % 1.23 % 1.60 %
NONINTEREST EXPENSE
Salaries and
overtime $ 35,435 $ 33,825 4.8 % 1.29 % 1.24 %
Fringe benefits and
other personnel
costs 8,275 7,827 5.7 0.30 0.29
Occupancy 5,778 6,026 (4.1) 0.21 0.22
Equipment 5,881 7,284 (19.3) 0.21 0.27
Foreclosed real estate
losses and related
operating expense 444 286 55.2 0.02 0.01
Marketing 2,362 2,531 (6.7) 0.09 0.09
Fees for outsourced
services 4,991 4,452 12.1 0.18 0.16
Professional and
legal fees 3,917 3,828 2.3 0.14 0.14
Other administrative 3,391 2,985 13.6 0.12 0.11
FDIC insurance 325 530 (38.7) 0.01 0.02
Deposit intangible and
goodwill
amortization 3,549 3,407 4.2 0.13 0.12
Office supplies,
postage and
telephone 6,317 6,455 (2.1) 0.23 0.24
Merger-related expenses
and other
significant charges 4,178 -- -- 0.15 --
Other operating 7,431 6,966 6.7 0.27 0.25
Total noninterest
expense $ 92,274 $ 86,402 6.8 % 3.35 % 3.16 %
OTHER PERFORMANCE RATIOS
Pretax operating
profit margin
(B)(D) 31.80 % 37.09 % (529) bp
Efficiency ratio
(C)(D) 60.07 % 57.36 % 271 bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.19 % 8.57 % 62 bp
Taxable securities 6.72 6.29 43
Tax-exempt
securities 8.80 7.82 98
Short-term
investments 6.59 6.88 (29)
Interest-earning
assets 8.56 7.95 61
Total interest-
bearing deposits 4.67 3.99 68
Borrowed funds 5.93 4.59 134
Long-term debt 6.48 5.86 62
Total interest-
bearing
liabilities 5.09 4.27 82
Interest rate
spread 3.47 3.68 (21)
Net interest
margin 4.10 4.22 (12)
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 and other significant charges.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle which was accounted for as a pooling-of-interests.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARIES
Six Months Ended June 30,
As a Percent of
Average Assets(A)
(Dollars in
thousands) 2000 1999 Change 2000 1999
NONINTEREST INCOME
Service charges on deposit
accounts $ 31,348 $ 30,924 1.4 % 0.56 % 0.57 %
Credit card and
related fees 4,121 3,857 6.8 0.07 0.07
Insurance and
brokerage
commissions 13,018 12,448 4.6 0.23 0.23
Other service charges,
commissions and
fees 6,919 6,766 2.3 0.12 0.12
Fees for trust
services 5,509 5,182 6.3 0.10 0.10
Mortgage income 9,248 14,102 (34.4) 0.17 0.26
Negative goodwill
amortization 669 669 -- 0.01 0.01
Operating lease
income, net 1,322 3,628 (63.6) 0.02 0.07
Other noninterest
income 13,823 7,920 74.5 0.26 0.15
Noninterest income,
excluding securities
transactions 85,977 85,496 0.6 1.54 1.58
Securities gains
(losses), net (23,805) 1,010 NM (0.42) 0.02
Total noninterest
income $ 62,172 $ 86,506 (28.1) % 1.12 % 1.60 %
NONINTEREST EXPENSE
Salaries and
overtime $ 71,053 $ 69,970 1.6 % 1.27 % 1.29 %
Fringe benefits and
other personnel
costs 16,423 16,208 1.3 0.29 0.30
Occupancy 12,231 12,341 (0.9) 0.22 0.23
Equipment 12,029 14,071 (14.5) 0.22 0.26
Foreclosed real estate
losses and related
operating expense 1,106 723 53.0 0.02 0.01
Marketing 3,841 4,828 (20.4) 0.07 0.09
Fees for outsourced
services 9,360 8,411 11.3 0.17 0.16
Professional and
legal fees 7,001 7,323 (4.4) 0.13 0.14
Other administrative 6,361 5,783 10.0 0.11 0.11
FDIC insurance 763 941 (18.9) 0.01 0.02
Deposit intangible
and goodwill
amortization 6,702 6,757 (0.8) 0.12 0.12
Office supplies,
postage and
telephone 12,690 12,441 2.0 0.23 0.23
Merger-related
expenses and other
significant
charges 28,516 6,858 -- 0.51 0.13
Other operating 14,840 14,197 4.5 0.27 0.25
Total noninterest
expense $ 202,916 $ 180,852 12.2 % 3.64 % 3.34 %
OTHER PERFORMANCE RATIOS
Pretax operating
profit margin
(B)(D) 35.41 % 36.64 % (123) bp
Efficiency ratio
(C)(D) 58.58 % 58.50 % 8 bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.07 % 8.60 % 47 bp
Taxable securities 6.67 6.26 41
Tax-exempt
securities 8.04 7.92 12
Short-term
investments 6.76 7.32 (56)
Interest-earning
assets 8.43 7.97 46
Total interest-
bearing deposits 4.53 4.03 50
Borrowed funds 5.86 4.73 113
Long-term debt 6.18 5.78 40
Total interest-
bearing
liabilities 4.93 4.31 62
Interest rate
spread 3.50 3.66 (16)
Net interest
margin 4.08 4.20 (12)
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 and other significant charges.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle 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
Second First Fourth
Quarter Quarter Quarter
FINANCIAL SUMMARY (A)
Assets $ 11,087,991 $ 11,333,016 $ 11,244,033
Earning assets, net 10,161,950 10,408,008 10,311,262
Loans, gross 7,604,252 7,481,313 7,363,250
Investment securities, net 2,456,812 2,774,077 2,820,815
Total deposits 7,581,910 7,819,217 7,864,788
Interest-bearing liabilities 8,974,603 9,256,578 9,066,703
Shareholders' equity 869,319 860,095 861,593
Total market capitalization
(period end) 1,353,339 1,817,042 1,742,779
Net income 20,923 8,035 35,549
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating profit
margin(B) 31.80 % 38.92 % 38.07 %
Efficiency ratio(B) 60.07 57.12 55.94
Net interest margin 4.10 4.07 4.20
Return on average assets 0.76 0.29 1.25
Return on average equity 9.68 3.76 16.37
Average equity to average assets 7.84 7.59 7.66
PER SHARE SUMMARY
Earnings per share - basic $ 0.53 $ 0.20 $ 0.90
Earnings per share - diluted 0.52 0.20 0.89
Cash dividends paid 0.34 0.32 0.30
Book value per share 22.09 21.72 21.77
Closing market price 33.953 45.813 44.125
KEY INTANGIBLE ASSETS (C)
Goodwill $ 125,606 $ 131,514 $ 134,851
Mortgage servicing rights 31,797 35,076 35,916
ASSET QUALITY SUMMARY(C)
Nonperforming assets $ 45,929 $ 37,161 $ 35,836
Allowance for loan losses 103,271 97,450 95,500
Nonperforming assets to
total assets 0.41 % 0.33 % 0.31 %
Allowance for loan losses
to total loans 1.35 1.29 1.28
Net charge-offs to average loans 0.32 0.22 0.38
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.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle which was accounted for as a pooling-of-interests.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARIES
(Dollars in thousands, except
per share data)
1999 2nd Qtr 00
Third Second vs.
Quarter Quarter 1st Qtr 00
FINANCIAL SUMMARY (A)
Assets $ 11,065,694 $ 10,972,828 (2.2) %
Earning assets, net 10,164,652 10,054,104 (2.4)
Loans, gross 7,305,302 7,231,015 1.6
Investment securities, net 2,722,460 2,671,440 (11.4)
Total deposits 7,770,777 7,717,245 (3.0)
Interest-bearing liabilities 8,897,333 8,799,616 (3.0)
Shareholders' equity 869,562 865,538 1.1
Total market capitalization
(period end) 1,649,174 2,241,137 (25.5)
Net income 31,953 35,656 160.4
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating profit
margin(B) 33.11 % 37.09 % (712) bp
Efficiency ratio(B) 56.65 57.36 295
Net interest margin 4.27 4.22 3
Return on average assets 1.15 1.30 47
Return on average equity 14.58 16.52 592
Average equity to average assets 7.86 7.89 25
PER SHARE SUMMARY
Earnings per share - basic $ 0.80 $ 0.90 165.0 %
Earnings per share - diluted 0.79 0.88 160.0
Cash dividends paid 0.29 0.29 6.3
Book value per share 21.74 21.44 1.7
Closing market price 41.375 56.375 (25.9)
KEY INTANGIBLE ASSETS (C)
Goodwill $ 138,334 $ 141,332 (4.5) %
Mortgage servicing rights 36,979 42,993 (9.3)
ASSET QUALITY SUMMARY(C)
Nonperforming assets $ 46,871 $ 65,219 23.6 %
Allowance for loan losses 93,701 96,125 6.0
Nonperforming assets to
total assets 0.42 % 0.59 % 8 bp
Allowance for loan losses
to total loans 1.28 1.32 6
Net charge-offs to average loans 0.98 0.33 10
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.
All prior period financial data has been restated for the February 18,
2000 merger with Triangle which was accounted for as a pooling-of-interests.
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
of Centura Banks, Inc., 252-454-8356, or sgoldstein@centura.com
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