ROCKY MOUNT, N.C., Oct. 5 /PRNewswire/ -- Centura Banks Inc. (NYSE: CBC)
announced today net income of $25.1 million for the third quarter of 1998, an
increase of 15.8 percent over the third quarter of 1997. Diluted earnings per
share in the third quarter increased to $0.93 compared to $0.82 for the
comparable quarter of 1997.
Net income was $71.7 million for the first nine months of 1998, an
increase of 20.3 percent from the first nine months of 1997. Return on
average assets improved three basis points from the second quarter of 1998 to
1.31 percent while the efficiency ratio improved 50 basis points to 61.52
percent.
Noninterest income increased 6.4 percent from the second to third quarter
and represents 31.2 percent of total revenues on a taxable equivalent basis.
Average loans outstanding increased at an annual rate of 7.2 percent and
average noninterest bearing deposits increased at an annual rate of 12.8
percent during the third quarter.
"We are very pleased with our record third quarter financial results,"
said Cecil W. Sewell, Centura chairman and chief executive officer. "In
particular, we are pleased with the continued growth of noninterest income as
a percentage of total revenues, which included an increase in deposit and
mortgage service fees. The dramatic increase in deposit fees was the direct
result of the realignment of Centura's product offering during the third
quarter, which provided our customers with a broader array of prices, services
and delivery channels to meet their individual financial objectives. The
third quarter results reaffirm our strategic intent to be the primary provider
of financial services for each customer by building ourselves as a full-line
retailer of banking, investment and insurance services."
With assets of $7.8 billion, Centura provides a complete line of banking,
investment, leasing, insurance and trust services to individuals and
businesses throughout North Carolina, South Carolina and the Hampton Roads
region of Virginia. Services are provided through 211 full-service financial
service offices; more than 315 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 September 30,
(Dollars in thousands, except 1998 1997 Change
per share data)
EARNINGS
Interest income $ 147,170 $ 131,844 11.6%
Interest expense 70,508 64,385 9.5
Net interest income 76,662 67,459 13.6
Provision for loan losses 4,041 3,486 15.9
Noninterest income 35,641 28,385 25.6
Noninterest expense 70,223 59,631 17.8
Income taxes 12,904 11,027 17.0
Net income $ 25,135 $ 21,700 15.8%
Net interest income, taxable
equivalent $ 78,513 $ 69,585 12.8%
PER COMMON SHARE
Earnings per share-
basic $ 0.95 $ 0.84 13.1%
Earnings per share-
diluted 0.93 0.82 13.4
Cash dividends paid 0.29 0.27 7.4
Book value 23.28 20.45 13.8
Closing market price 63.0000 55.0625 14.4
FINANCIAL RATIOS
Return on average assets 1.31% 1.28% 3 bp
Return on average shareholders'
equity 16.45 16.58 (13)
Average equity to average assets 7.95 7.70 25
AVERAGE BALANCES
Assets $7,630,774 $6,738,633 13.2%
Earning assets 6,951,132 6,177,675 12.5
Loans 4,991,800 4,372,404 14.2
Investment securities 1,933,096 1,771,094 9.1
Noninterest-bearing deposits 856,126 741,991 15.4
Core deposits 5,028,351 4,582,679 9.7
Total deposits 5,560,743 4,967,064 12.0
Interest-bearing liabilities 6,044,908 5,391,079 12.1
Shareholders' equity 606,270 519,175 16.8
PERIOD END BALANCES
Assets $7,804,848 $6,891,281 13.3%
Earning assets 7,126,805 6,227,309 14.4
Loans 5,012,758 4,511,074 11.1
Investment securities 2,094,469 1,693,347 23.7
Noninterest-bearing deposits 895,160 824,703 8.5
Core deposits 5,064,655 4,798,695 5.5
Total deposits 5,568,980 5,209,836 6.9
Shareholders' equity 618,388 529,464 16.8
bp Change is measured as difference in basis points.
Nine Months Ended September 30,
(Dollars in thousands, except 1998 1997 Change
per share data)
EARNINGS
Interest income $ 427,933 $ 377,953 13.2%
Interest expense 206,231 181,143 13.8
Net interest income 221,702 196,810 12.6
Provision for loan losses 11,069 9,569 15.7
Noninterest income 100,724 77,759 29.5
Noninterest expense 202,996 173,852 16.8
Income taxes 36,695 31,594 16.1
Net income $ 71,666 $ 59,554 20.3%
Net interest income,
taxable equivalent $ 227,170 $ 202,632 12.1%
PER COMMON SHARE
Earnings per share-basic $ 2.72 $ 2.31 17.7%
Earnings per share-diluted 2.67 2.26 18.1
Cash dividends paid 0.85 0.79 7.6
Book value 23.28 20.45 13.8
Closing market price 63.0000 55.0625 14.4
FINANCIAL RATIOS
Return on average assets 1.29% 1.23% 6 bp
Return on average
shareholders' equity 16.42 15.83 59
Average equity to average assets 7.84 7.79 5
AVERAGE BALANCES
Assets $7,445,842 $6,461,140 15.2%
Earning assets 6,777,642 5,933,940 14.2
Loans 4,853,438 4,223,754 14.9
Investment securities 1,896,724 1,679,043 13.0
Noninterest-bearing deposits 820,719 695,119 18.1
Core deposits 4,940,268 4,420,253 11.8
Total deposits 5,443,800 4,784,461 13.8
Interest-bearing liabilities 5,926,261 5,178,989 14.4
Shareholders' equity 583,710 503,049 16.0
PERIOD END BALANCES
Assets $7,804,848 $6,891,281 13.3%
Earning assets 7,126,805 6,227,309 14.4
Loans 5,012,758 4,511,074 11.1
Investment securities 2,094,469 1,693,347 23.7
Noninterest-bearing deposits 895,160 824,703 8.5
Core deposits 5,064,655 4,798,695 5.5
Total deposits 5,568,980 5,209,836 6.9
Shareholders' equity 618,388 529,464 16.8
bp Change is measured as difference in basis points.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars 1998 1997 Change 1998 1997 Change
in thousands)
SHARES OUTSTANDING
Average basic 26,549,022 25,842,902 2.7% 26,364,975 25,779,234 2.3%
Average
diluted 27,030,789 26,415,293 2.3 26,873,328 26,303,968 2.2
Outstanding
at period end 26,560,264 25,893,357 2.6 26,560,264 25,893,357 2.6
COMPOSITION RATIOS *
Earning assets
to total assets 91.09% 91.68% (59) bp 91.03% 91.84% (81) bp
Loans to earning
assets 71.81 70.78 103 71.61 71.18 43
Interest-bearing
liabilities to
earning assets 86.96 87.27 (31) 87.44 87.28 16
Loans to total
deposits 89.77 88.03 174 89.16 88.28 88
Noninterest-bearing
deposits to
total deposits 15.40 14.94 46 15.08 14.53 55
ALLOWANCE FOR LOAN LOSSES
Beginning
balance $66,991 $59,206 13.1% $64,279 $58,715 9.5%
Provision for
loan losses 4,041 3,486 15.9 11,069 9,569 15.7
Allowance of
acquired financial
institutions -- 2,410 (100.0) 2,068 2,410 (14.2)
Charge-offs (4,636) (3,271) 41.7 (13,034) (10,527) 23.8
Recoveries 709 451 57.2 2,723 2,115 28.7
Net
charge-offs (3,927) (2,820) 39.3 (10,311) (8,412) 22.6
Ending balance $67,105 $62,282 7.7% $67,105 $62,282 7.7%
Net charge-offs
to average loans 0.31% 0.26% 5 bp 0.28% 0.27% 1 bp
COMPOSITION OF RISK ASSETS
Nonperforming loans $28,453 $23,390 21.6%
Foreclosed property 3,631 5,243 (30.7)
Nonperforming assets $32,084 $28,633 12.1%
ASSET QUALITY RATIOS **
Nonperforming assets to:
Loans and foreclosed property 0.64% 0.63% 1 bp
Total assets 0.41 0.42 (1)
Nonperforming loans to total loans 0.57 0.52 5
Allowance for loan losses to total loans 1.34 1.38 (4)
Allowance for loan
losses to nonperforming loans 2.36x 2.66x (0.3)x
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 September 30,
As a Percent of
Average Assets *
(Dollars in thousands) 1998 1997 Change 1998 1997
NONINTEREST INCOME
Service charges on
deposit accounts $ 12,786 $ 10,744 19.0% 0.66% 0.63%
Credit card and
related fees 2,333 1,951 19.6 0.12 0.11
Insurance and brokerage
commissions 4,718 3,305 42.8 0.25 0.19
Other service charges,
commissions and fees 2,838 2,119 33.9 0.15 0.12
Fees for trust services 2,400 1,830 31.2 0.12 0.11
Mortgage income 4,691 2,801 67.5 0.24 0.16
Negative goodwill
amortization 334 334 - 0.02 0.02
Operating lease fees,
net 1,754 1,268 38.3 0.09 0.08
Other noninterest
income 3,446 3,872 (11.0) 0.18 0.24
Noninterest income,
excluding securities
transactions 35,300 28,224 25.1 1.83 1.66
Securities gains, net 341 161 111.8 0.02 0.01
Total noninterest
income $ 35,641 $ 28,385 25.6% 1.85% 1.67%
NONINTEREST EXPENSE
Salaries and
overtime $ 28,119 $ 23,392 20.2% 1.46% 1.38%
Fringe benefits and
other personnel
costs 5,941 5,216 13.9 0.31 0.31
Occupancy 4,084 3,618 12.9 0.21 0.21
Equipment 5,191 5,455 (4.8) 0.27 0.32
Foreclosed real estate
losses and related
operating expense 336 265 26.8 0.02 0.02
Marketing 2,165 2,053 5.5 0.11 0.12
Fees for outsourced
services 3,399 2,215 53.5 0.18 0.13
Professional fees 3,712 4,677 (20.6) 0.19 0.28
Other administrative 2,110 2,132 (1.0) 0.11 0.13
FDIC insurance 338 321 5.3 0.02 0.02
Deposit intangible and
goodwill amortization 2,243 1,611 39.2 0.12 0.09
Office supplies, postage
and telephone 5,396 3,946 36.8 0.28 0.23
Other operating 7,189 4,730 52.0 0.37 0.27
Total noninterest
expense $ 70,223 $ 59,631 17.8% 3.65% 3.51%
OTHER PERFORMANCE RATIOS
Pretax operating
profit margin ** 34.94% 35.58% (64) bp
Efficiency ratio *** 61.52% 60.87% 65 bp
Net interest income
analysis-taxable
equivalent:
Selected average
yields/rates:
Loans 9.22% 9.38% (16) bp
Taxable securities 6.64 6.63 1
Tax-exempt
securities 8.74 8.94 (20)
Short-term
investments 5.86 5.23 63
Interest-earning
assets 8.50 8.59 (9)
Total interest-bearing
deposits 4.33 4.40 (7)
Borrowed funds 5.25 5.39 (14)
Long-term debt 6.22 6.95 (73)
Total interest-bearing
liabilities 4.61 4.72 (11)
Interest rate
spread 3.89 3.87 2
Net interest margin 4.48 4.46 2
bp Change is measured as difference in basis points.
* Data presented is annualized.
** Sum of income before taxes plus the taxable equivalent adjustment
divided by the sum of taxable equivalent net interest income plus
noninterest income.
*** Noninterest expense divided by sum of taxable equivalent net interest
income plus noninterest income.
Nine Months Ended September 30,
As a Percent of
Average Assets *
(Dollars in thousands) 1998 1997 Change 1998 1997
NONINTEREST INCOME
Service charges on
deposit accounts $ 34,909 $ 29,588 18.0% 0.63% 0.61%
Credit card and
related fees 5,927 4,721 25.5 0.11 0.10
Insurance and brokerage
commissions 14,982 10,086 48.5 0.27 0.21
Other service charges,
commissions and fees 7,595 5,680 33.7 0.14 0.12
Fees for trust services 6,900 5,730 20.4 0.12 0.12
Mortgage income 12,516 8,268 51.4 0.22 0.17
Negative goodwill
amortization 1,003 1,003 - 0.02 0.02
Operating lease
fees, net 5,464 3,234 69.0 0.10 0.07
Other noninterest
income 10,858 9,414 15.3 0.19 0.19
Noninterest income,
excluding securities
transactions 100,154 77,724 28.9 1.80 1.61
Securities gains, net 570 35 1,528.6 0.01 -
Total noninterest
income $ 100,724 $ 77,759 29.5% 1.81% 1.61%
NONINTEREST EXPENSE
Salaries and
overtime $ 80,529 $ 66,985 20.2% 1.45% 1.39%
Fringe benefits and
other personnel
costs 18,050 16,536 9.2 0.32 0.34
Occupancy 11,794 10,399 13.4 0.21 0.22
Equipment 15,711 15,920 (1.3) 0.28 0.33
Foreclosed real estate
losses and related
operating expense 930 987 (5.8) 0.02 0.02
Marketing 6,815 6,199 9.9 0.12 0.13
Fees for outsourced
services 9,470 5,888 60.8 0.17 0.12
Professional fees 9,836 11,230 (12.4) 0.18 0.23
Other administrative 7,000 6,149 13.8 0.13 0.13
FDIC insurance 1,041 960 8.4 0.02 0.02
Deposit intangible and
goodwill amortization 6,684 4,447 50.3 0.12 0.09
Office supplies, postage
and telephone 15,040 12,517 20.2 0.27 0.26
Other operating 20,096 15,635 28.5 0.36 0.32
Total noninterest
expense $ 202,996 $ 173,852 16.8% 3.65% 3.60%
OTHER PERFORMANCE RATIOS
Pretax operating
profit margin ** 34.72% 34.58% 14 bp
Efficiency ratio *** 61.91% 62.00% (9) bp
Net interest income
analysis-taxable equivalent:
Selected average
yields/rates:
Loans 9.24% 9.37% (13) bp
Taxable securities 6.64 6.63 1.0
Tax-exempt
securities 8.88 8.89 (1)
Short-term
investments 5.43 5.38 5
Interest-earning
assets 8.51 8.59 (8)
Total interest-bearing
deposits 4.34 4.40 (6)
Borrowed funds 5.26 5.20 6
Long-term debt 6.49 6.57 (8)
Total interest-bearing
liabilities 4.64 4.66 (2)
Interest rate spread 3.87 3.93 (6)
Net interest margin 4.45 4.52 (7)
bp Change is measured as difference in basis points.
* Data presented is annualized.
** Sum of income before taxes plus the taxable equivalent adjustment
divided by the sum of taxable equivalent net interest income plus
noninterest income.
*** Noninterest expense divided by sum of taxable equivalent net interest
income plus noninterest income.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARIES
1998 1997 3rd Qtr 98
Third Second First Fourth Third vs.
Quarter Quarter Quarter Quarter Quarter 2nd Qtr 98
(Dollars in thousands, except per share data)
FINANCIAL SUMMARY *
Assets $7,630,774 $7,530,503 $7,171,199 $7,016,355 $6,738,633 1.3%
Earning
assets 6,951,132 6,839,222 6,538,033 6,416,636 6,177,675 1.6
Loans 4,991,800 4,905,005 4,659,863 4,562,210 4,372,404 1.8
Investment
secur-
ities 1,933,096 1,909,105 1,847,024 1,824,878 1,771,094 1.3
Total
deposits 5,560,743 5,439,886 5,328,216 5,240,681 4,967,064 2.2
Interest-bearing
liabil-
ities 6,044,908 6,000,169 5,730,250 5,603,768 5,391,079 0.7
Shareholders'
equity 606,270 584,778 559,568 531,935 519,175 3.7
Total market
capitalization
(period
end) 1,673,297 1,658,538 1,892,382 1,784,504 1,425,753 0.9
Net income 25,135 24,054 22,477 23,504 21,700 4.5
PROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating
profit
margin *** 34.94 34.66% 34.52% 34.44% 35.58% 28 bp
Efficiency
ratio + 61.52 62.02 62.22 61.90 60.87 (50)
Net interest
margin 4.48 4.43 4.43 4.51 4.46 5
Return on
average
assets 1.31 1.28 1.27 1.33 1.28 3
Return on
average
equity 16.45 16.50 16.29 17.53 16.58 (5)
Equity to
assets
(average) 7.95 7.77 7.80 7.58 7.70 18
PER SHARE SUMMARY
Earnings per
share -
basic $0.95 $0.91 $0.87 $0.91 $0.84 4.4%
Earnings per
share -
diluted 0.93 0.89 0.85 0.89 0.82 4.5
Cash dividends
paid 0.29 0.29 0.27 0.27 0.27 --
Book value
per share 23.28 22.22 21.62 20.82 20.45 4.8
Closing
market
price 63.0000 62.5000 71.2500 69.0000 55.0625 0.8
KEY INTANGIBLE ASSETS **
Goodwill $104,671 $105,204 $107,293 $106,108 $97,027 (0.5)%
Mortgage
servicing
rights 31,197 29,917 28,147 28,238 28,275 4.3
ASSET QUALITY SUMMARY **
Nonperforming
assets $32,084 $33,418 $33,199 $27,877 $28,633 (4.0)%
Allowance for
loan
losses 67,105 66,991 66,828 64,279 62,282 0.2
Nonperforming
assets to total
assets 0.41% 0.44% 0.44% 0.39% 0.42% (3) bp
Allowance for
loan losses
to total
loans 1.34 1.36 1.38 1.40 1.38 (2)
Net charge-offs
to average
loans 0.31 0.28 0.25 0.22 0.26 3
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.
*** Sum of income before taxes plus the taxable equivalent adjustment
divided by the sum of taxable equivalent net interest income plus
noninterest income.
+ Noninterest expense divided by sum of taxable equivalent net interest
income plus noninterest income.
SOURCE Centura Banks Inc.
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Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 870954
CONTACT:
Steven Goldstein, Chief Financial Officer,
Centura Banks Inc., 252-454-8356 or sgoldstein@centura.com
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