ROCKY MOUNT, N.C., Oct. 8 /PRNewswire/ -- Centura Banks, Inc. (NYSE: CBC)
today announced third quarter 1999 earnings of $24.7 million, or $0.86 per
diluted share. Net income is after a nonrecurring charge of $0.17 per diluted
share related to the Pluma, Inc. bankruptcy filing, and compares with $0.92 in
the year-ago quarter and $1.00 earned in the second quarter of 1999. Without
the charge, net income would have been $1.03 per diluted share.
These results produced a return on average assets of 1.12% and a return on
average equity of 13.98%. Excluding the Pluma related charge, the return on
average assets was 1.34% while the return on average equity was 16.81%,
compared with second quarter 1999 ratios of 1.32% and 16.58%, respectively.
During the quarter, Centura charged off $11.8 million of the $23 million
Pluma credit, which was placed on nonaccrual status as of June 30, 1999.
Pluma, an Eden, N.C.-based manufacturer of fleece and jersey sportswear, filed
for Chapter 11 bankruptcy protection in May 1999. Centura's estimated loss
associated with this credit is approximately $14.0 million, which has been
fully reserved.
"Our third quarter performance was overshadowed by the resolution of
Pluma, which is now behind us," said Cecil W. Sewell, Centura chairman and
chief executive officer. "Textiles represent only a small percentage of
Centura's loan portfolio, and Pluma was an isolated incident and not
reflective of the overall textile industry in this region, and certainly not
endemic to Centura's loan portfolio."
At September 30, 1999, nonperforming assets totaled $41.5 million,
representing 0.47% of total assets compared with $60 million and 0.68%,
respectively, at June 30, 1999. Centura had $23 million of total loans
outstanding to Pluma as part of a $115 million syndicated credit package.
Including Pluma, textile-related loans represent less than 2% of Centura's
commercial loan portfolio.
"Following Pluma, we can now refocus our attention on Centura's
performance as a full-line retailer of financial services," Sewell said. "We
continue to strive toward our goal of providing value for both customers and
shareholders by offering a complete suite of banking, investment and insurance
solutions to our customers.
"Many of our customers and neighbors were severely impacted by the
widespread flooding in eastern North Carolina in the wake of hurricane Floyd
in September," Sewell continued. "The direct effect on Centura, however, was
minimal and we don't expect any material adverse financial impact arising from
the aftermath of the flooding. We have examined a significant portion of
major credits across all sectors and don't foresee any material impairment to
credit quality, though we do expect some natural deposit outflow as consumers
and businesses draw down cash balances to rebuild. Overall, we plan to take
an active role in rebuilding eastern North Carolina, which should have a long-
term positive impact on both our customers and our business."
During the quarter, Centura took a number of strategic steps to further
strengthen its position as a full-line retailer of financial services for
individuals and small businesses. Chief among these was its agreement to
acquire Raleigh-based Triangle Bancorp, Inc. The acquisition will
significantly expand Centura's market share in key metropolitan areas
throughout North Carolina and is expected to increase efficiencies at the
combined bank. In addition, Centura completed the sale of CLG, Inc., its
technology equipment leasing operation, and sold its $395 million Ginnie Mae
mortgage servicing portfolio, which is approximately 11% of the entire
servicing portfolio.
"These steps solidify Centura's customer-focused position in the
marketplace," Sewell said. "The acquisition of Triangle Bancorp allows us to
serve more customers more efficiently with more products and services in the
towns and cities where we already do business. The sale of CLG enables us to
refocus our leasing efforts on our core customers -- individuals and small
businesses.
"The Ginnie Mae sale was driven by the value inherent in the current rate
environment combined with the increased operating efficiencies expected at
Centura as a result of the sale of this labor intensive segment of our
servicing portfolio," Sewell continued. "Rates for conventional 30-year,
fixed-rate loans are hovering around 8.125%, and the average interest rate of
the Ginnie Mae portfolio was 7.56%, so borrowers in the portfolio aren't
likely to refinance soon. This made the servicing portfolio much more
attractive to potential buyers. It was a very opportune time to sell."
When compared with the second quarter of 1999, period-end commercial loans
increased $81.3 million, representing an annualized rate of 9.1%, while the
retail loan portfolio grew at an annualized rate of 12.5%. The leasing
portfolio declined $101.6 million, principally due to the sale of CLG and the
continued reduced interests in auto leasing.
For the nine-month period ending September 30, 1999, Centura earned
$84.8 million, or $2.93 per diluted share, before the third quarter
Pluma-related charge and the non-recurring charges for the merger with First
Coastal Bankshares, Inc., completed during the first quarter of 1999. This
compares with net income of $74.9 million, or $2.62 per diluted share for the
same period a year ago. Net income totaled $74.1 million or $2.57 per diluted
share for the first nine months of 1999.
Centura's board of directors has authorized the repurchase of up to
1,000,000 shares of common stock. Such repurchases may be completed in
privately negotiated transactions or in open market purchases and may be
discontinued at any time. "Based on current market conditions, we believe
that our stock represents an exceptional value and this is a particularly
opportune time to repurchase shares," Sewell said.
With assets of $8.9 billion, Centura provides a full line of banking,
investment, insurance, leasing and trust services to individuals and
businesses in North Carolina, South Carolina and Virginia. Centura's broad
range of financial services are provided through a variety of delivery
channels, including 227 full-service financial offices; more than 230 ATMs;
the Centura Highway telephone banking center; Centura's Internet site; and
through leading online money management packages. Additional information may
be found on Centura's website at http://www.centura.com .
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 Change 1999 1998 Change
(Dollars in thousands, except per share data)
EARNINGS
Interest
income $162,465 $158,560 2.5% $478,019 $463,581 3.1%
Interest
expense 76,183 77,186 (1.3) 224,846 227,442 (1.1)
Net interest
income 86,282 81,374 6.0 253,173 236,139 7.2
Provision for
loan losses 14,400 4,041 256.3 27,077 11,069 144.6
Noninterest
income 41,459 37,018 12.0 118,449 103,957 13.9
Noninterest
expense 75,602 74,391 1.6 232,386 215,478 7.8
Income taxes 12,996 13,613 (4.5) 38,051 38,632 (1.5)
Net income $24,743 $26,347 (6.1)% $74,108 $74,917 (1.1)%
Net interest
income, taxable
equivalent $88,134 $83,225 5.9% $258,617 $241,607 7.0%
PER COMMON SHARE
Earnings per
share - basic $0.87 $0.93 (6.5)% $2.60 $2.67 (2.6)%
Earnings per
share - diluted 0.86 0.92 (6.5) 2.57 2.62 (1.9)
Cash
dividends paid 0.32 0.29 10.3 0.93 0.85 9.4
Book value
per share 24.51 23.52 4.2 24.51 23.52 4.2
Closing
market price 41.375 63.000 (34.3) 41.375 63.000 (34.3)
FINANCIAL RATIOS
Return on average
assets 1.12% 1.27% (15)bp 1.13% 1.24% (11)bp
Return on
average equity 13.98 16.03 (205) 14.21 15.94 (173)
Average equity
to average
assets 8.00 7.93 7 7.94 7.80 14
AVERAGE BALANCES
Assets $8,776,455 $8,225,607 6.7% $8,773,625 $8,059,106 8.9%
Earning
assets 8,044,674 7,520,744 7.0 8,025,388 7,368,422 8.9
Loans 5,863,879 5,446,908 7.7 5,861,987 5,318,008 10.2
Investment
securities 2,124,579 2,043,215 4.0 2,111,405 2,018,619 4.6
Noninterest-
bearing
deposits 936,216 883,978 5.9 922,961 845,451 9.2
Core
deposits 5,385,805 5,427,295 (0.8) 5,432,528 5,346,786 1.6
Total
deposits 6,012,293 5,965,263 0.8 6,011,194 5,856,734 2.6
Interest-
bearing
liabil-
ities 7,015,865 6,559,422 7.0 7,022,051 6,464,511 8.6
Shareholders'
equity 702,101 652,202 7.7 697,049 628,550 10.9
PERIOD END BALANCES
Assets $8,876,485 $8,383,120 5.9% $8,876,485 $8,383,120 5.9%
Earning
assets 8,127,579 7,683,745 5.8 8,127,579 7,683,745 5.8
Loans 5,852,553 5,460,334 7.2 5,852,553 5,460,334 7.2
Investment
securities 2,201,092 2,193,366 0.4 2,201,092 2,193,366 0.4
Noninterest-
bearing
deposits 967,488 923,236 4.8 967,488 923,236 4.8
Core
deposits 5,414,984 5,455,964 (0.8) 5,414,984 5,455,964 (0.8)
Total
deposits 6,034,436 5,965,548 1.2 6,034,436 5,965,548 1.2
Shareholders'
equity 698,507 664,512 5.1 698,507 664,512 5.1
bp Change is measured as difference in basis points.
All prior period financial data has been restated for the "pooling" with
First Coastal Bankshares, Inc.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 Change 1999 1998 Change
(Dollars in thousands)
SHARES OUTSTANDING
Average
basic 28,477,202 28,243,980 0.8% 28,468,226 28,059,243 1.5%
Average
diluted 28,810,597 28,771,526 0.1 28,882,785 28,620,490 0.9
Outstanding
at period
end 28,496,626 28,255,688 0.9 28,496,626 28,255,688 0.9
COMPOSITION RATIOS (A)
Earning assets
to total
assets 91.66% 91.43% 23bp 91.47% 91.43% 4bp
Loans to earning
assets 72.89 72.43 46 73.04 72.17 87
Interest-bearing
liabilities to
earning
assets 87.21 87.22 (1) 87.50 87.73 (23)
Loans to total
deposits 97.53 91.31 622 97.52 90.80 672
Noninterest-bearing
deposits to total
deposits 15.57 14.82 75 15.35 14.44 91
ALLOWANCE FOR LOAN LOSSES (AFLL)
Beginning
balance $75,519 $71,262 6.0% $72,310 $68,576 5.4%
AFLL related to loans
sold and subsidiary
sale (456) -- -- (556) -- --
Provision for
loan losses 14,400 4,041 256.3 27,077 11,069 144.6
Allowance of
acquired
financial
institutions -- -- -- 605 2,068 (70.7)
Charge-offs (17,382) (4,639) 274.7 (28,873) (13,069) 120.9
Recoveries 538 726 (25.9) 2,056 2,746 (25.1)
Net charge-
offs (16,844) (3,913) 330.5 (26,817) (10,323) 159.8
Ending
balance $72,619 $71,390 1.7% $72,619 $71,390 1.7%
Net charge-offs
to average
loans(C) 1.16% 0.29% 87bp 0.62% 0.26% 36bp
Net charge-offs
to average
loans(C)(E) 0.35 0.29 6 0.35 0.26 9
COMPOSITION OF RISK ASSETS
Nonperforming
loans $37,924 $32,403 17.0%
Foreclosed
property 3,594 5,135 (30.0)
Nonperforming
assets $41,518 $37,538 10.6%
ASSET QUALITY RATIOS (D)
Nonperforming assets to:
Loans and foreclosed property(B) 0.72% 0.70% 2bp
Total assets 0.47 0.45 2
Nonperforming loans to total loans(B) 0.66 0.60 6
Allowance for loan losses to total loans(B) 1.26 1.33 (7)
Allowance for loan losses to nonperforming loans 1.91 x 2.20 x (29)
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 $70.2 million and
$91.0 million at September 30, 1999 and 1998, respectively.
(C) Excludes mortgage loans held-for-sale, on average, of $80.9 and
$103.4 for the three months ended September 30, 1999 and 1998,
respectively and $104.4 and $91.7 for the nine months ended
September 30, 1999 and 1998, respectively.
(D) Balance sheet amounts used in calculations are based on period end
balances.
(E) Excludes $11.8 million isolated charge-off incurred during the third
quarter related to the Pluma credit.
All prior period financial data has been restated for the "pooling" with
First Coastal Bankshares, Inc.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended September 30,
As a Percent of
Average Assets(A)
(Dollars in thousands) 1999 1998 Change 1999 1998
NONINTEREST INCOME
Service charges on
deposit accounts $ 13,750 $ 13,069 5.2 % 0.62 % 0.63 %
Credit card and
related fees 2,603 1,884 38.2 0.12 0.09
Insurance and
brokerage commissions 5,873 4,718 24.5 0.27 0.23
Other service charges,
commissions and fees 2,718 3,128 (13.1) 0.12 0.15
Fees for trust services 2,586 2,400 7.8 0.12 0.12
Mortgage income 7,142 6,114 16.8 0.32 0.29
Negative goodwill
amortization 334 334 -- 0.02 0.02
Operating lease
income, net 1,856 1,754 5.8 0.08 0.09
Other noninterest
income 6,283 3,184 97.3 0.28 0.14
Noninterest income,
excluding securities
transactions 43,145 36,585 17.9 1.95 1.76
Securities gains, net (1,686) 433 489.4 (0.08) 0.03
Total noninterest
income $ 41,459 $ 37,018 12.0 % 1.87 % 1.79 %
NONINTEREST EXPENSE
Salaries and
overtime $ 30,855 $ 29,860 3.3 % 1.39 % 1.44 %
Fringe benefits and
other personnel costs 6,812 6,467 5.3 0.31 0.31
Occupancy 4,913 4,704 4.4 0.22 0.23
Equipment 5,233 5,542 (5.6) 0.24 0.27
Foreclosed real estate
losses and related
operating expense 594 265 124.2 0.03 0.01
Marketing 1,964 2,331 (15.7) 0.09 0.11
Fees for outsourced
services 3,594 3,399 5.7 0.16 0.16
Professional and legal
fees 3,424 3,835 (10.7) 0.15 0.18
Other administrative 2,643 2,219 19.1 0.12 0.11
FDIC insurance 363 403 (9.9) 0.02 0.02
Deposit intangible and
goodwill amortization 2,642 2,244 17.7 0.12 0.11
Office supplies, postage
and telephone 5,227 5,609 (6.8) 0.24 0.27
Merger-related expenses -- -- -- -- --
Other operating 7,338 7,513 (2.3) 0.33 0.37
Total noninterest
expense $ 75,602 $ 74,391 1.6 % 3.42 % 3.59 %
OTHER PERFORMANCE RATIOS
Pretax operating profit
margin, excluding
merger-related
expenses(B) 30.55 % 34.77 % (422) bp
Efficiency ratio,
excluding merger-
related expenses(C) 58.34 % 61.87 % (353) bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 8.65 % 9.18 % (53) bp
Taxable securities 6.44 6.58 (14)
Tax-exempt securities 8.57 8.62 (5)
Short-term investments 5.35 5.78 (43)
Interest-earning
assets 8.04 8.47 (43)
Total interest-bearing
deposits 3.92 4.37 (45)
Borrowed funds 4.82 5.64 (82)
Long-term debt 5.95 5.57 38
Total interest-bearing
liabilities 4.29 4.65 (36)
Interest rate spread 3.75 3.82 (7)
Net interest margin 4.32 4.40 (8)
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.
All prior period financial data has been restated for the pooling with
First Coastal Bankshares, Inc.
Nine Months Ended September 30,
As a Percent of
Average Assets (A)
(Dollars in thousands) 1999 1998 Change 1999 1998
NONINTEREST INCOME
Service charges on
deposit accounts $ 40,165 $ 35,633 12.7 % 0.61 % 0.59 %
Credit card and
related fees 6,134 4,642 32.1 0.09 0.08
Insurance and brokerage
commissions 17,334 14,982 15.7 0.26 0.25
Other service charges,
commissions and fees 8,717 8,369 4.2 0.13 0.14
Fees for trust services 7,768 6,900 12.6 0.12 0.11
Mortgage income 19,952 16,255 22.7 0.30 0.27
Negative goodwill
amortization 1,003 1,003 -- 0.02 0.02
Operating lease
income, net 5,484 5,464 0.4 0.08 0.09
Other noninterest
income 13,100 10,047 30.4 0.21 0.16
Noninterest income,
excluding securities
transactions 119,657 103,295 15.8 1.82 1.71
Securities gains,
net (1,208) 662 (282.5) (0.01) 0.01
Total noninterest
income $ 118,449 $ 103,957 13.9 % 1.81 % 1.72 %
NONINTEREST EXPENSE
Salaries and
overtime $ 92,011 $ 85,958 7.0 % 1.40 % 1.43 %
Fringe benefits and
other personnel
costs 21,300 19,527 9.1 0.32 0.32
Occupancy 14,871 13,608 9.3 0.23 0.23
Equipment 15,800 16,678 (5.3) 0.24 0.28
Foreclosed real estate
losses and related
operating expense 1,273 990 28.6 0.02 0.02
Marketing 6,011 7,365 (18.4) 0.09 0.12
Fees for outsourced
services 11,059 9,470 16.8 0.17 0.16
Professional and legal
fees 10,481 10,223 2.5 0.16 0.17
Other administrative 7,566 7,311 3.5 0.12 0.12
FDIC insurance 1,108 1,229 (9.9) 0.02 0.02
Deposit intangible and
goodwill amortization 7,819 6,685 17.0 0.12 0.11
Office supplies, postage
and telephone 15,814 15,646 1.1 0.24 0.26
Merger-related
expenses 6,858 -- -- 0.10 --
Other operating 20,415 20,788 (1.8) 0.31 0.33
Total noninterest
expense $ 232,386 $ 215,478 7.9 % 3.54 % 3.57 %
OTHER PERFORMANCE RATIOS
Pretax operating profit
margin, excluding
merger-related
expenses(B) 33.01 % 34.44 % (143)bp
Efficiency ratio,
excluding merger-
related expenses(C) 59.81 % 62.36 % (255)bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 8.59 % 9.19 % (60)bp
Taxable securities 6.39 6.62 (23)
Tax-exempt securities 8.81 8.84 (3)
Short-term investments 5.30 5.33 (3)
Interest-earning
assets 8.00 8.49 (49)
Total interest-bearing
deposits 3.93 4.39 (46)
Borrowed funds 4.75 5.65 (90)
Long-term debt 5.81 5.80 1
Total interest-bearing
liabilities 4.26 4.69 (43)
Interest rate spread 3.74 3.80 (6)
Net interest margin 4.27 4.36 (9)
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.
All prior period financial data has been restated for the pooling with
First Coastal Bankshares, Inc.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARIES
1999 1998 3rd Qtr 99
Third Second First Fourth Third vs.
Quarter Quarter Quarter Quarter Quarter 2nd Qtr 99
(Dollars in thousands, except per share data)
FINANCIAL SUMMARY (A)
Assets $8,776,455 $8,774,091 $8,770,262 $8,561,203 $8,225,607 --%
Earning
assets 8,044,674 8,022,462 8,008,631 7,833,188 7,520,744 0.3
Loans 5,863,879 5,872,026 5,849,901 5,611,039 5,446,908 (0.1)
Investment
securities 2,124,579 2,101,580 2,107,805 2,179,818 2,043,215 1.1
Total
deposits 6,012,293 6,014,766 6,006,459 5,984,683 5,965,263 --
Interest-bearing
liabilities 7,015,865 7,015,157 7,035,344 6,826,099 6,559,422 --
Shareholders'
equity 702,101 696,366 692,576 673,130 652,202 0.8
Total market
capitalization (period
end) 1,179,048 1,604,735 1,658,039 2,106,168 1,780,108 (26.5)
Net
income 24,743 28,789 20,577 25,397 26,347 (14.1)
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating profit
margin(B) 30.55 % 35.56 % 33.01 % 33.95% 34.77% (501)bp
Efficiency
ratio(B) 58.34 59.30 61.88 62.25 61.87 (96)
Net interest
margin 4.32 4.26 4.22 4.26 4.40 6
Return on
average
assets 1.12 1.32 0.95 1.18 1.27 (20)
Return on
average
equity 13.98 16.58 12.05 14.97 16.03 (260)
Average equity to
average
assets 8.00 7.94 7.90 7.86 7.93 6
PER SHARE SUMMARY
Earnings per
share -
basic $ 0.87 $ 1.01 $ 0.72 $ 0.90 $ 0.93 (13.9)%
Earnings per
share -
diluted 0.86 1.00 0.71 0.88 0.92 (14.0)
Cash dividends
paid 0.32 0.32 0.29 0.29 0.29 --
Book value per
share 24.51 24.16 24.30 23.88 23.52 1.4
Closing market
price 41.3750 56.3750 58.1875 74.3750 63.0000 (26.6)
KEY INTANGIBLE ASSETS (C)
Goodwill $117,510 $ 119,651 $ 121,162 $ 102,858 $ 104,671 (1.8)%
Mortgage servicing
rights 33,422 39,673 37,468 33,464 31,473 (15.8)
ASSET QUALITY SUMMARY(C)
Nonperforming
assets $ 41,518 $ 59,952 $ 41,979 $ 38,105 $ 37,538 (30.7)%
Allowance for
loan
losses 72,619 75,519 74,139 72,310 71,390 (3.8)
Nonperforming assets to
total assets 0.47 % 0.68 % 0.48 % 0.43 % 0.45% (21)bp
Allowance for loan
losses to total
loans(D) 1.26 1.31 1.30 1.27 1.33 (5)
Net charge-offs to
average
loans (D) 1.16 0.34 0.36 0.26 0.29 82
bp Change is measured as difference in basis points.
(A) Balance sheet amounts are based on average balances unless otherwise
noted.
(B) 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 pooling with
First Coastal Bankshares, Inc.
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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