ROCKY MOUNT, N.C., Jan. 7 /PRNewswire/ -- Centura Banks Inc. (NYSE: CBC)
today reported record profitability in the fourth quarter and for the year
ended December 31, 1997. Centura's net income for 1997 was $83.1 million, an
increase of 21.9 percent over 1996. (14.7 percent without the one-time
Savings Association Insurance Fund (SAIF) charge in 1996.) Diluted earnings
per share rose to $3.15 compared to $2.60 the prior year. ($2.76 without
SAIF.)
For the fourth quarter diluted earnings per share were 89 cents, return on
assets was 1.33 percent, and return on equity was 17.53 percent, compared to
70 cents, 1.19 percent and 15.61 percent, respectively, for fourth quarter
1996.
Return on assets for the year was 1.26 percent, and return on equity was
16.28 percent. Asset quality in 1997 continued to exceed industry standards,
with net charge-offs at 0.25 percent of total loans, and non-performing loans
at 0.52 percent of total loans.
Noninterest income for 1997 increased 16.2 percent to $117.2 million, led
by growing revenue from insurance, securities and leasing services; as well as
more traditional banking sources, including mortgage origination and
servicing, service charges on deposits and loan fees. Core balance sheet
growth was strong for the year, with loans increasing to $4.6 billion, 11.6
percent higher than 1996, and deposits rising 13.3 percent to $5.4 billion,
while the net interest margin remained stable at 4.56 percent for 1997
compared to 4.66 percent for 1996.
"The disciplined execution of our business plan to aggressively grow and
expand the franchise and continued leverage of our investment in technology
were critical to our earnings success in 1997," said Cecil W. Sewell, Centura
chairman and chief executive officer. "During the year we acquired or opened
34 financial centers, significantly grew our insurance business, expanded into
the Virginia market, formalized an agreement to enter the South Carolina
market and posted record earnings for the fourth quarter and the year. We
could not be more pleased."
In 1997 Centura acquired 19 banking offices, most notably 13 offices as a
result of the Branch Banking and Trust merger with United Carolina Bank, and
five from NationsBank. Also during the year Centura significantly invested in
its in-store initiative, opening 12 full-service financial offices in
Hannaford supermarkets, including five in the Hampton Roads region of
Virginia, and Wal-Mart and K-Mart retail outlets. The 12 new in-store
financial offices are among 22 opened in the past 16 months, representing an
aggressive effort to pursue in-store banking as part of Centura's overall
strategy to deliver money management services at times and locations that are
most convenient to customers.
Early in 1997 Centura formed a Capital Markets Group to offer clients more
complex funding and investment alternatives by providing direct access to
money and capital markets and non-traditional sources of capital. Based in
Charlotte, the group primarily services clients in North and South Carolina
and Virginia.
In the fall of 1997 Centura significantly expanded its insurance
capabilities by acquiring two North Carolina insurance agencies, Betts &
Company and Moore & Johnson, and forming an alliance with Travelers Insurance
Co. The Moore & Johnson merger is expected to consummate at the end of
January. As part of Centura's long-term strategy to provide customers with a
full range of financial services, the additions to Centura Insurance Services
will provide increased insurance choices for customers at more competitive
rates. Customers will have the option of highly personalized service or the
ease and convenience of a toll-free hot line to Travelers for more routine
insurance needs.
In December of 1997 Centura signed a definitive agreement to acquire Pee
Dee State Bank, headquartered in Timmonsville, South Carolina. The
acquisition marks Centura's initial foray into the South Carolina market, an
important strategic move for the company as it aggressively expands into
attractive new markets.
With assets of $7.1 billion, Centura provides a complete line of banking,
investment, leasing, insurance and trust services to individuals and
businesses throughout North Carolina and the Hampton Roads region of Virginia.
Services are provided through 192 financial service centers, including 20
full-service locations in Hannaford supermarkets; more than 300 ATMs at
financial centers, Wal-Mart stores and Sam's outlets; Centura Highway;
Centura's Internet site; and through Quicken(R), Quickbooks(R), Microsoft(R)
Money and BankNOW(TM), the leading online money management software packages.
Additional information about Centura is available on its website at
http://www.centura.com.
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended December 31, Year Ended December 31,
1997 1996 Change 1997 1996 Change
(In thousands, except share and per share data)
EARNINGS
Interest
income $ 137,136 $ 123,095 11.4% $ 515,089 $ 469,760 9.6%
Interest
expense 66,041 57,011 15.8 247,184 219,676 12.5
Net interest
income 71,095 66,084 7.6 267,905 250,084 7.1
Provision for
loan
losses 3,849 2,746 40.2 13,418 9,596 39.8
Noninterest
income 34,117 27,303 25.0 117,221 100,847 16.2
Noninterest
expense 67,033 61,860 8.4 246,230 233,981 5.2
Income
taxes 10,826 10,246 5.7 42,420 39,203 8.2
Net
income $ 23,504 $ 18,535 26.8% $ 83,058 $ 68,151 21.9%
Net interest income,
taxable
equiva-
lent $ 73,000 $ 67,738 7.8% $ 275,632 $ 256,109 7.6%
PER COMMON SHARE
Earnings per share-
basic $ 0.91 $ 0.72 26.4% $ 3.22 $ 2.66 21.1%
Earnings per share-
diluted 0.89 0.70 27.1 3.15 2.60 21.2
Cash dividends
paid 0.27 0.25 8.0 1.06 1.00 6.0
Book value 20.82 18.51 12.5 20.82 18.51 12.5
Closing market
price 69.000 44.625 54.6 69.000 44.625 54.6
FINANCIAL RATIOS
Return on average
assets 1.33% 1.19% 14 bp 1.26% 1.14% 12 bp
Return on average
shareholders'
equity 17.53 15.61 192 16.28 15.02 126
Average equity to
average assets 7.58 7.62 (4) 7.73 7.62 11
AVERAGE BALANCES
Assets $ 7,016,355 6,197,670 13.2% $ 6,601,084 $ 5,956,290 10.8%
Earning
assets 6,416,636 5,703,321 12.5 6,055,606 5,484,974 10.4
Loans 4,562,210 4,181,963 9.1 4,309,064 4,014,391 7.3
Investment
securi-
ties 1,824,878 1,491,008 22.4 1,715,801 1,436,215 19.5
Noninterest-bearing
deposits 783,938 690,111 13.6 717,506 647,245 10.9
Core
deposits 4,784,855 4,368,319 9.5 4,512,153 4,101,773 10.0
Total
deposits 5,240,681 4,723,099 11.0 4,899,453 4,505,449 8.7
Interest-bearing
liabili-
ties 5,603,768 4,944,155 13.3 5,286,057 4,765,846 10.9
Shareholders'
equity 531,935 472,484 12.6 510,330 453,746 12.5
PERIOD END BALANCES
Assets $ 7,125,430 6,293,972 13.2% $ 7,125,430 $ 6,293,972 13.2%
Earning
assets 6,458,063 5,720,001 12.9 6,458,063 5,720,001 12.9
Loans 4,586,582 4,109,454 11.6 4,586,582 4,109,454 11.6
Investment
securities 1,828,056 1,577,880 15.9 1,828,056 1,577,880 15.9
Noninterest-
bearing
deposits 816,475 721,029 13.2 816,475 721,029 13.2
Core
deposits 4,892,847 4,386,616 11.5 4,892,847 4,386,616 11.5
Total
deposits 5,364,925 4,733,069 13.3 5,364,925 4,733,069 13.3
Shareholders'
equity 538,336 475,235 13.3 538,336 475,235 13.3
bp Change is measured as difference in basis points.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended December 31, Year Ended December 31,
1997 1996 Change 1997 1996 Change
(In thousands, except share data)
SHARES OUTSTANDING
Average
basic 25,854,971 25,727,599 0.5% 25,798,324 25,605,621 0.8%
Average
diluted 26,413,005 26,449,289 (0.1) 26,331,392 26,261,830 0.3
Outstanding at
period
end 25,862,375 25,668,524 0.8 25,862,375 25,668,524 0.8
COMPOSITION RATIOS*
Earning assets
to assets 91.45% 92.02% (57)bp 91.74% 92.09% (35)bp
Loans to earning
assets 71.10 73.33 (223) 71.16 73.19 (203)
Interest-bearing
liabilities to
earning
assets 87.33 86.69 64 87.29 86.89 40
Loans to total
deposits 87.05 88.54 (149) 87.95 89.10 (115)
Noninterest-bearing
deposits to
total
deposits 14.96 14.61 35 14.64 14.37 27
ALLOWANCE FOR
LOAN LOSSES
Beginning
balance $ 62,282 $ 60,329 3.2% $ 58,715 $ 55,070 6.6%
Provision for
loan
losses 3,849 2,746 40.2 13,418 9,596 39.8
Allowance of
acquired
financial
institutions 723 -- 100.0 3,133 1,240 152.7
Charge-offs (3,898) (4,995) (22.0) (14,425) (10,408) 38.6
Recoveries 1,323 635 108.3 3,438 3,217 6.9
Net charge-
offs (2,575) (4,360) (40.9) (10,987) (7,191) 52.8
Ending
balance $ 64,279 $ 58,715 9.5% $ 64,279 $ 58,715 9.5%
Net charge-offs
to average
loans 0.22% 0.41% (19)bp 0.25% 0.18% 7 bp
COMPOSITION OF RISK ASSETS
Nonaccrual
loans $ 23,722 $ 18,713 26.8%
Restructured loans
0 497 (100.0)
Nonperforming loans 23,722 19,210 23.5
Foreclosed property 4,155 3,663 13.4
Nonperforming assets $ 27,877 $ 22,873 21.9%
ASSET QUALITY RATIOS**
Nonperforming assets to:
Loans and foreclosed property 0.61% 0.56% 5 bp
Total assets 0.39 0.36 3
Nonperforming loans to total loans 0.52 0.47 5
Allowance for loan losses to total loans 1.40 1.43 (3)
Allowance for loan losses to nonperforming loans 2.71x 3.06x (35)
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 SUBSIDIARIES
Three Months Ended December 31,
As a Percent of
Average Assets#
1997 1996 Change 1997 1996
(Dollars in thousands)
NONINTEREST INCOME
Service charges on deposit
accounts $ 11,115 $ 9,401 18.2% 0.63% 0.60%
Credit card and
related fees 1,922 1,391 38.2 0.11 0.09
Insurance & brokerage
commissions 3,945 2,948 33.8 0.22 0.19
Other service charges,
commissions and fees 2,245 1,947 15.3 0.13 0.12
Fees for trust services 2,007 1,900 5.6 0.11 0.12
Mortgage income 3,300 2,591 27.4 0.19 0.17
Negative goodwill
amortization 334 334 0.0 0.02 0.02
Operating lease fees 3,293 3,226 2.1 0.19 0.21
Other noninterest income 5,855 3,449 69.8 0.32 0.22
Noninterest income,
excluding securities
transactions 34,016 27,187 25.1 1.92 1.74
Securities gains
(losses), net 101 116 (12.9) 0.01 0.01
Total noninterest
income $ 34,117 $ 27,303 25.0% 1.93% 1.75
NONINTEREST EXPENSE
Salaries and
overtime $ 25,523 $ 24,115 5.8% 1.44% 1.55%
Fringe benefits and
other personnel
costs 4,581 4,892 (6.4) 0.26 0.31
Occupancy 3,397 3,209 5.9 0.19 0.21
Equipment 5,712 5,437 5.1 0.32 0.35
Foreclosed real estate
losses and related
operating expense 386 299 29.1 0.02 0.02
Marketing 2,881 2,730 5.5 0.16 0.18
Fees for outsourced
services 1,965 1,017 93.2 0.11 0.07
Professional fees 5,050 4,436 13.8 0.29 0.28
Other administrative 2,406 2,267 6.1 0.14 0.15
FDIC insurance 344 (4) -- 0.02 0.00
Deposit intangible and
goodwill amortization 2,073 1,343 54.4 0.12 0.09
Office supplies, postage
and telephone 4,185 4,243 (1.4) 0.24 0.27
Depreciation on leased
equipment 1,902 1,357 40.2 0.11 0.09
Other operating 6,628 6,519 1.7 0.37 0.40
Total noninterest
expense $ 67,033 $ 61,860 8.4% 3.79% 3.97%
OTHER PERFORMANCE RATIOS
Pretax operating
profit margin + 33.83% 32.02% 181 bp
Efficiency ratio*** 62.58% 65.09% (251)bp
Net interest income
analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.33% 9.34% (1)bp
Taxable securities 6.70 6.65 5
Tax-exempt securities 9.06 8.99 7
Short-term
investments 4.99 5.43 (44)
Interest-earning
assets 8.58 8.63 (5)
Total interest-bearing
deposits 4.38 4.35 3
Borrowed funds 5.32 5.25 7
Long-term debt 6.64 6.47 17
Total interest-bearing
liabilities 4.66 4.59 7
Interest rate spread 3.92 4.04 (12)
Net interest margin 4.51 4.66 (15)
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.
Year Ended December 31,
As a Percent of
Average Assets
1997 1996 Change 1997 1996
(Dollars in thousands)
NONINTEREST INCOME
Service charges on
deposit accounts $ 40,703 $ 34,758 17.1% 0.62% 0.58%
Credit card
and related fees 6,643 4,979 33.4 0.10 0.08
Insurance & brokerage
commissions 14,031 11,097 26.4 0.21 0.19
Other service charges,
commissions and fees 7,925 5,926 33.7 0.12 0.10
Fees for trust services 7,737 6,841 13.1 0.12 0.11
Mortgage income 11,568 11,486 0.7 0.18 0.19
Negative goodwill
amortization 1,337 1,337 0.0 0.02 0.02
Operating lease fees 11,872 12,745 (6.9) 0.18 0.21
Other noninterest income 15,269 9,880 54.5 0.23 0.18
Noninterest income,
excluding securities
transactions 117,085 99,049 18.2 1.78 1.66
Securities gains
(losses), net 136 1,798 (92.4) 0.00 0.03
Total noninterest
income $ 117,221 $ 100,847 16.2% 1.78% 1.69%
NONINTEREST EXPENSE
Salaries and overtime $ 92,508 $ 88,411 4.6% 1.40% 1.48%
Fringe benefits and other
personnel costs 21,117 21,256 (0.7) 0.32 0.36
Occupancy 13,796 12,657 9.0 0.21 0.21
Equipment 21,632 19,556 10.6 0.33 0.33
Foreclosed real estate
losses and related
operating expense 1,373 756 81.6 0.02 0.01
Marketing 9,080 7,549 20.3 0.14 0.13
Fees for outsourced
services 6,758 2,166 212.0 0.10 0.04
Professional fees 17,375 12,423 39.9 0.26 0.21
Other administrative 8,555 8,544 0.1 0.13 0.14
FDIC insurance 1,304 10,197 (87.2) 0.02 0.17
Deposit intangible and goodwill
amortization 6,520 5,034 29.5 0.10 0.08
Office supplies, postage and
telephone 16,702 16,188 3.2 0.25 0.27
Depreciation on
leased equipment 7,247 7,944 (8.8) 0.11 0.13
Other operating 22,263 21,300 4.5 0.34 0.37
Total noninterest
expense $ 246,230 $ 233,981 5.2% 3.73% 3.93%
OTHER PERFORMANCE RATIOS
Pretax operating
profit margin + 33.91% 31.76% 215 bp
Efficiency ratio*** 62.68% 65.55% (287)bp
Net interest income
analysis-taxable equivalent:
Selected average
yields/rates:
Loans 9.43% 9.45% (2)bp
Taxable securities 6.64 6.48 16
Tax-exempt
securities 8.93 8.87 6
Short-term
investments 5.36 5.20 16
Interest-earning
assets 8.64 8.67 (3)
Total interest-
bearing deposits 4.40 4.38 2
Borrowed funds 5.30 5.17 13
Long-term debt 6.68 6.32 36
Total interest-
bearing liabilities 4.68 4.61 7
Interest rate spread 3.96 4.06 (10)
Net interest margin 4.56 4.66 (10)
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 SUBSIDIARIES
1997 1996 4th Qtr 97
Fourth Third Second First Fourth vs.
(Dollars in Quarter Quarter Quarter Quarter Quarter 3rd Qtr 97
(thousands)
FINANCIAL SUMMARY *
Assets $7,016,355 $6,738,633 $6,453,981 $6,184,718 $6,197,670 4.1%
Earning
assets 6,416,636 6,177,675 5,926,035 5,692,783 5,703,321 3.9
Loans 4,562,210 4,372,404 4,188,811 4,107,133 4,181,963 4.3
Investment
secur-
ities 1,824,878 1,771,094 1,710,960 1,552,675 1,491,008 3.0
Total
deposits 5,240,681 4,967,064 4,725,511 4,657,405 4,723,099 5.5
Interest-bearing
liabil-
ities 5,603,768 5,391,079 5,185,562 4,955,541 4,944,155 3.9
Stockholders'
equity 531,935 519,175 501,027 488,609 472,484 2.5
Total market
capitalization
(period
end) 1,784,504 1,425,753 1,183,788 1,004,335 1,145,458 25.2
Net income 23,504 21,700 19,980 17,874 18,535 8.3
PROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating
profit
margin + 33.83% 35.03% 34.31% 32.37% 32.02% (120)bp
Efficiency
ratio *** 62.58 61.47 62.32 64.47 65.09 111
Net interest
margin # 4.51 4.46 4.52 4.58 4.66 5
Return on
average
assets # 1.33 1.28 1.24 1.17 1.19 5
Return on
average
equity # 17.53 16.58 16.00 14.84 15.61 95
Equity to
assets
(average) 7.58 7.70 7.76 7.90 7.62 (12)
PER SHARE SUMMARY
Earnings per
share -
basic $0.91 $0.84 $0.78 $0.69 $0.72 8.3%
Earnings per
share -
diluted 0.89 0.82 0.76 0.68 0.70 8.5
Cash dividends
paid 0.27 0.27 0.27 0.25 0.25 0.0
Book value
per share 20.82 20.45 19.46 19.08 18.51 1.8
Closing market
price 69.000 55.0625 45.875 39.000 44.625 25.3
KEY INTANGIBLE ASSETS **
Goodwill $104,222 $95,012 $61,833 $63,122 $64,411 9.7%
Deposit base
premium 1,886 2,015 2,143 2,272 2,401 (6.4)
Mortgage
servicing
rights 28,238 28,275 23,028 21,481 21,046 (0.1)
ASSET QUALITY SUMMARY **
Nonperforming
assets $27,877 $28,633 $27,740 $26,768 $22,873 (2.6)%
Allowance
for loan
losses 64,279 62,282 59,206 58,762 58,715 3.2
Nonperforming
assets to
total assets 0.39% 0.42% 0.42% 0.42% 0.36% (3)bp
Allowance for
loan losses
to loans 1.40 1.38 1.40 1.42 1.43 2
Net charge-offs
to average
loans # 0.22 0.26 0.26 0.28 0.41 (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.
SOURCE Centura Banks Inc.
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Related links:
http://www.centura.com
CONTACT:
Steven J. Goldstein, Centura Banks Inc.,
919-977-8356, or sgoldstein@centura.com
CNOC: http://www.prnewswire.com or fax, 800-758-5804, ext.
870954
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