MEMPHIS, Tenn., Oct. 11 /PRNewswire/ -- National Commerce Financial
Corporation (NYSE: NCF) today announced record third quarter earnings.
For the quarter ended September 30, 2001, NCF's operating cash earnings,
defined as net income adjusted for goodwill amortization, core deposit
amortization and non-recurring expenses, net of tax, were $80.4 million
compared to $69.8 million in the third quarter of 2000, an increase of 15.2%.
Operating cash earnings per diluted share were $.39 in third quarter 2001,
compared to $.34 per share in third quarter 2000, a 14.7 percent increase.
On an operating cash basis, the Company's annualized return on average
tangible assets and return on average tangible shareholders' equity were 1.90
percent and 25.48 percent, respectively, for the third quarter. These
compared with 2000 third quarter returns of 1.75 percent and 24.59 percent,
respectively.
"I am very pleased with our performance in the third quarter," noted
Ernest C. Roessler, president and chief executive officer of NCF. "Credit
quality remained solid despite continued weakness in the economy. Good loan
and deposit growth accompanied by a 3 basis point improvement in the net
margin drove growth in net interest income from last quarter, which offset a
slight decline in fee revenues. Expense control was good, resulting in an
improved efficiency ratio. While posting solid results, we continued to
execute on our expansion strategy, completing our acquisition of First
Vantage-Tennessee (Knoxville, TN) during the quarter and announcing the
acquisitions of SouthBanc Shares, Inc. (Anderson, SC) and the divested
branches of Wachovia. The integration efforts for the latter transactions
have begun and are on track."
For the nine months ended September 30, 2001, NCF's operating cash
earnings were $230.4 million compared to $127.3 million for the nine months
ended September 30, 2000. Operating cash earnings per diluted share were
$1.11 for the nine months ended September 30, 2001, compared to $.89 per share
for the nine months ended September 30, 2000, a 24.7 percent increase.
On an operating cash basis, the Company's annualized return on average
tangible assets and return on average tangible shareholders' equity were 1.87
percent and 25.19 percent respectively, for the first nine months of 2001.
These compared with 2000 returns for the same period of 1.67 percent and 23.31
percent, respectively.
For the quarter and nine months ended September 30, 2001, the Company
reported non-recurring expenses, net of tax, of $1.9 million, consisting of
conversion and integration costs associated with the acquisitions of First
Vantage, SouthBanc and the divested branches of Wachovia. For the quarter and
nine months ended September 30, 2000, the Company reported non-recurring
expenses, net of tax, of $42.3 million and $47.1 million, respectively,
consisting of unrealized losses on interest rate swaps and conversion and
merger-related costs associated with the Company's merger of equals with CCB
Financial Corporation.
For the quarter and nine months ended September 30, 2001, respectively,
NCF's diluted earnings per share were $.28 and $.80, compared to $.03 and
$.38, respectively, per share in the same periods of 2000. Net income for the
quarter and nine months ended September 30, 2001, respectively, were $57.6
million and $165.4 million, compared to $5.8 million and $53.7 million,
respectively, reported for the same periods a year earlier.
Consolidated assets totaled $18.5 billion at September 30, 2001, up 4.5
percent from $17.7 billion at September 30, 2000. During the third quarter of
2001, NCF's average loans and leases increased to $11.4 billion, compared to
$10.5 billion for the third quarter of 2000. Average deposits increased to
$11.9 billion in the third quarter of 2001 from $11.3 billion in third quarter
2000. Excluding approximately $67 million of loans and $75 million of
deposits attributable to the third quarter 2001 acquisition of First Vantage,
average loans and average deposits increased 7.9 percent and 4.6 percent,
respectively, over the year ago quarter.
NET INTEREST EARNINGS
Net interest earnings, on a taxable equivalent basis, were $173.5 million
in the third quarter of 2001, compared to $156.7 million for the third quarter
of 2000, a 10.7 percent increase. The third quarter net interest margin was
4.43 percent, compared to 4.20 percent for third quarter 2000 and 4.40 percent
in second quarter 2001. The cost of interest-bearing liabilities decreased
from 4.45 percent in second quarter 2001 to 4.00 percent in third quarter
2001, while the taxable equivalent yield on earning assets decreased from 8.26
percent to 7.91 percent.
NON-INTEREST INCOME AND EXPENSE
Non-interest income (excluding securities gains and losses) totaled $76.6
million in third quarter 2001 versus $67.2 million for third quarter 2000, an
increase of 14.0 percent. Strong increases were experienced in deposit
service charges, transaction processing fees, mortgage banking and
institutional broker/dealer revenues.
Non-interest expenses, excluding non-recurring expenses, for the third
quarter 2001 were $140.1 million, compared to $137.8 million in third quarter
2000 and $144.9 million in second quarter 2001. The Company's cash efficiency
ratio, the ratio of non-interest expenses, excluding intangibles amortization
and non-recurring expenses, to net revenues, was 44.97 percent for the third
quarter 2001, compared to 48.16 percent for third quarter 2000 and 47.67
percent for second quarter 2001.
Financial Enterprises, comprised of NCF's transaction processing, trust
and asset management, consulting and capital markets businesses, earned net
income of $8.4 million for the third quarter of 2001 as compared to $6.4
million for the third quarter of 2000, an increase of 31.3 percent.
PROVISION FOR LOAN LOSSES
The provision for loan losses in the third quarter of 2001 was $9.6
million, compared to $5.1 million for third quarter 2000. Annualized net
charge-offs for the third quarter of 2001 were .21 percent of average loans,
compared to .18 percent of average loans in the year-ago quarter and .17
percent in the second quarter of 2001.
NON-PERFORMING LOANS AND ASSETS
Total risk assets, including loans past due 90 days or more, were $56.2
million (.49 percent of net loans) at September 30, 2001, compared to $39.8
million at September 30, 2000 (.37 percent of net loans) and $49.0 million at
June 30, 2001 (.44 percent of net loans) . Non-performing assets amounted to
$23.8 million at September 30, 2001 (.21 percent of net loans) compared to
$19.6 million at June 30, 2001 (.17 percent of net loans). The loan loss
reserve amounts to 1.31 percent of total net loans at September 30, 2001
compared to 1.32 percent at September 30, 2000 and 1.30 percent at June 30,
2001.
ABOUT NCF
National Commerce Financial Corporation has $18.5 billion in assets and
nearly 400 locations in nine Southeastern states. NCF, headquartered in
Memphis, TN, with its operations headquarters in Durham, NC, is a sales and
marketing organization that delivers select financial and consulting services
through a national network of banking affiliates and non-banking affiliates.
FORWARD-LOOKING STATEMENTS
These statements constitute forward-looking statements (within the meaning
of the Private Securities Litigation Reform Act of 1995), which involve
significant risks and uncertainties. A variety of factors could cause actual
results and experience to differ materially from the anticipated results or
other expectations expressed in such forward-looking statements.
NCF does not assume any obligation to update these forward-looking
statements or to update the reasons why actual results could differ from those
projected in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to
competition from both financial and non-financial institutions; changes in
interest rates, deposit flows, loan demand and real estate values; changes in
legislation or regulation; changes in accounting principles, policies or
guidelines; the timing and occurrence (or non-occurrence) of transactions and
events that may be subject to circumstances beyond the control of NCF; and
other economic, competitive, governmental, regulatory and technological
factors affecting NCF specifically or the banking industry or economy
generally.
NATIONAL COMMERCE FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Three Months Ended
Income Statement 09/30/2001 06/30/2000 3/31/2001 2/31/2000 9/30/2000
Loan income (TE) $237,958 242,174 249,355 258,241 253,399
Securities income (TE) 71,610 73,746 79,051 81,206 79,649
Other interest income (TE) 790 974 1,855 1,504 3,864
Total interest income
(TE) 310,358 316,894 330,261 340,951 336,912
Savings/NOW and money
market expense 26,395 29,164 35,791 38,193 37,568
Jumbo and brokered CD
expense 16,210 21,994 29,685 34,250 33,236
Consumer time deposit
expense 59,452 62,849 64,683 63,706 61,224
Interest expense on
deposits 102,057 114,007 130,159 136,149 132,028
Short-term borrowed funds
expense 8,602 9,578 15,831 17,849 21,934
FHLB advances expense 25,586 23,688 23,416 27,586 25,643
Long-term debt expense 646 646 642 648 648
Total interest expense 136,891 147,919 170,048 182,232 180,253
Net interest income (TE) 173,467 168,975 160,213 158,719 156,659
Taxable equivalent
adjustment 7,866 6,874 7,170 6,878 7,822
Net interest income 165,601 162,101 153,043 151,841 148,837
Provision for loan losses 9,623 6,304 6,380 5,317 5,098
Net interest income after
provision 155,978 155,797 146,663 146,524 143,739
Service charges on
deposits 29,639 30,460 27,290 26,063 26,640
Other service charges and
fees 9,427 9,064 8,736 9,823 9,247
Trust and employee benefit
plan income 11,422 13,382 13,882 13,977 14,275
Broker/dealer revenue and
other commissions 15,114 16,202 15,066 10,751 9,649
Other 11,042 9,435 8,183 8,773 7,402
Investment securities
gains (losses) 2,588 575 720 (141) 4,522
Total noninterest
income 79,232 79,118 73,877 69,246 71,735
Personnel 58,063 62,447 59,900 60,626 57,241
Occupancy 9,610 9,159 9,322 9,661 10,119
Equipment 6,399 6,135 5,835 7,263 6,464
Goodwill amortization 12,060 12,046 12,074 12,060 11,941
Core deposit amortization 14,389 14,622 15,042 15,461 15,881
Other 39,562 40,515 34,974 38,667 36,175
Losses on interest rate
swaps (1) - - 672 57,221 12,324
Conversion/merger expenses
(2) 3,122 - - 25,892 44,765
Total noninterest
expense 143,205 144,924 137,819 226,851 194,910
Income before income taxes 92,005 89,991 82,721 (11,081) 20,564
Income taxes 34,394 34,456 30,431 (2,669) 14,775
GAAP net income 57,611 55,535 52,290 (8,412) 5,789
Amortization of goodwill
and core deposit, net of
tax 20,837 20,965 21,250 21,491 21,628
Cash net income (3) 78,448 76,500 73,540 13,079 27,417
Non-recurring items,
after-tax (1) (2) 1,904 - - 53,567 42,334
Operating cash earnings
(3) $80,352 76,500 73,540 66,646 69,751
GAAP Earnings Per Share
and Ratios
Operating GAAP earnings
(1) (2) (3):
Basic earnings per
share $.29 .27 .25 .22 .23
Diluted earnings per
share .29 .27 .25 .22 .23
Return on average
tangible assets (3) 1.41 % 1.36 1.30 1.10 1.21
Return on average
tangible equity (3) 18.88 18.00 17.99 15.49 16.97
GAAP net income:
Basic earnings per
share $.28 .27 .25 (.04) .03
Diluted earnings per
share .28 .27 .25 (.04) .03
Return on average
tangible assets (3) 1.37 % 1.36 1.30 (.20) .15
Return on average
tangible equity (3) 18.27 18.00 17.99 (2.89) 2.04
Return on average
assets 1.28 1.27 1.21 (.19) .13
Return on average
equity 9.46 9.19 8.87 (1.39) .98
NATIONAL COMMERCE FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Three Months Ended
Cash Earnings Per Share and Ratios 09/30/2001 06/30/2001 03/31/2001
Operating cash earnings (1) (2) (3):
Basic earnings per share $.39 .37 .36
Diluted earnings per share .39 .37 .35
Return on average tangible
assets (3) 1.90 % 1.87 1.82
Return on average tangible
equity (3) 25.48 24.80 25.29
Cash net income (3):
Basic earnings per share $.38 .37 .36
Diluted earnings per share .38 .37 .35
Return on average tangible
assets (3) 1.86 % 1.87 1.82
Return on average tangible
equity (3) 24.88 24.80 25.29
Average tangible equity to average
tangible assets (3) 7.48 7.54 7.20
Cash Efficiency Ratios
As a percentage of average tangible
assets (3) (excluding non-
recurring items (1) (2) and
amortization of intangibles):
Noninterest income 1.88 % 1.93 1.83
Personnel expense 1.38 1.53 1.48
Occupancy and equipment expense .38 .37 .38
Other operating expense .94 .99 .88
Noninterest expense 2.70 2.89 2.74
Net overhead (noninterest
exp. - noninterest inc.) .82 % .96 .91
Noninterest expense as a percentage
of net interest
income (TE) and other income
(excluding non-reccurring
items (1) (2) and amortization
of intangibles) 44.97 % 47.67 47.29
Average Balances
Assets $17,899,618 17,604,925 17,581,548
Tangible assets (3) 16,734,682 16,419,104 16,368,869
Loans (all domestic) (4):
Commercial 2,754,651 2,689,381 2,656,499
Construction and commercial real
estate 3,071,879 2,950,444 2,889,249
Mortgage 1,775,924 1,814,964 1,785,875
Consumer 3,569,413 3,493,513 3,509,229
Revolving credit 61,125 61,235 62,211
Lease financing 137,861 133,351 130,244
Total loans 11,370,853 11,142,888 11,033,307
Investment securities (5) 4,103,249 4,090,134 4,204,465
Earning assets (5) 15,609,871 15,371,113 15,430,752
Goodwill 911,204 918,208 930,169
Core deposit premium 253,732 267,613 282,510
Deposits:
Demand deposits (noninterest-
bearing) 1,491,593 1,417,129 1,284,045
Savings/NOW and money market
accounts 4,657,037 4,525,169 4,455,858
Jumbo and brokered CD's 1,504,141 1,696,004 2,031,238
Consumer time deposits 4,225,175 4,196,083 4,170,022
Total deposits 11,877,946 11,834,385 11,941,163
Short-term borrowed funds 1,047,314 984,703 1,179,763
FHLB advances 2,090,236 1,878,033 1,544,128
Long-term debt 39,376 39,379 39,380
Interest-bearing liabilities 13,563,279 13,319,371 13,420,389
Stockholders' equity 2,415,884 2,423,250 2,391,764
Tangible stockholders' equity (3) 1,250,948 1,237,429 1,179,085
Three Months Ended
Cash Earnings Per Share and Ratios 12/31/2000 09/30/2000
Operating cash earnings (1) (2) (3):
Basic earnings per share .32 .34
Diluted earnings per share .32 .34
Return on average tangible assets (3) 1.62 1.75
Return on average tangible equity (3) 22.86 24.59
Cash net income (3):
Basic earnings per share .06 .13
Diluted earnings per share .06 .13
Return on average tangible assets (3) .32 .69
Return on average tangible equity (3) 4.49 9.67
Average tangible equity to average
tangible assets (3) 7.10 7.11
Cash Efficiency Ratios
As a percentage of average tangible
assets (3) (excluding non-
recurring items (1) (2) and
amortization of intangibles):
Noninterest income 1.69 1.80
Personnel expense 1.48 1.44
Occupancy and equipment expense .41 .42
Other operating expense .94 .91
Noninterest expense 2.83 2.77
Net overhead (noninterest exp.
- noninterest inc.) 1.14 .97
Noninterest expense as a percentage
of net interest
income (TE) and other income
(excluding non-reccurring
items (1) (2) and amortization of
intangibles) 50.98 48.16
Average Balances
Assets 17,568,713 17,078,334
Tangible assets (3) 16,328,607 15,866,271
Loans (all domestic) (4):
Commercial 2,625,855 2,491,256
Construction and commercial real
estate 2,750,605 2,527,587
Mortgage 1,791,150 1,729,083
Consumer 3,559,848 3,532,893
Revolving credit 68,753 67,889
Lease financing 128,881 120,352
Total loans 10,925,092 10,469,060
Investment securities (5) 4,326,002 4,155,934
Earning assets (5) 15,391,415 14,898,896
Goodwill 942,307 911,137
Core deposit premium 297,799 300,926
Deposits:
Demand deposits (noninterest-
bearing) 1,394,011 1,282,276
Savings/NOW and money market
accounts 4,343,972 4,195,504
Jumbo and brokered CD's 2,158,017 2,078,178
Consumer time deposits 3,951,793 3,736,116
Total deposits 11,847,793 11,292,074
Short-term borrowed funds 1,158,326 1,411,844
FHLB advances 1,716,218 1,532,451
Long-term debt 39,385 37,952
Interest-bearing liabilities 13,367,711 12,992,045
Stockholders' equity 2,399,718 2,340,383
Tangible stockholders' equity (3) 1,159,612 1,128,320
NATIONAL COMMERCE FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
As Of And For The Three Months
Ended
Allowance For Loan Losses 09/30/2001 06/30/2001 03/31/2001
Beginning balance $145,659 144,039 143,614
Provision for loan losses 9,623 6,304 6,380
Additions from acquired
institutions 1,331 - -
Recoveries 1,637 1,671 2,052
Charge-offs (7,763) (6,355) (8,007)
Ending balance $150,487 145,659 144,039
Net charge-offs by loan type:
Commercial $729 519 743
Construction and commercial
real estate 3 30 29
Secured by real estate 485 21 452
Consumer 3,848 3,556 4,545
Revolving credit 218 354 89
Lease financing 843 204 97
Total net charge-offs $6,126 4,684 5,955
Non-Performing and Risk Assets
Nonaccrual loans $15,466 11,780 10,977
Foreclosed real estate 8,347 7,787 5,512
Total nonperforming
assets 23,813 19,567 16,489
Restructured loans - - 2,224
Ninety days past due and accruing 32,426 29,397 21,682
Total risk assets $56,239 48,964 40,395
Asset Quality Ratios
Total risk assets to:
Net loans .49 % .44 .36
Total assets .30 .27 .23
Loan loss allowance to total risk
assets 2.68 x 2.97 3.57
Net charge-offs to average loans
(annualized) .21 % .17 .22
Loan loss allowance to total
loans 1.31 1.30 1.30
Share and Per Share Data
Common shares outstanding 204,032,413 204,359,873 205,487,104
Weighted average shares
outstanding:
Basic 204,307,702 205,433,029 205,632,478
Diluted 206,723,011 207,891,271 208,544,880
Cash dividends $.15 .13 .13
Book value 11.84 11.68 11.66
Closing stock price (6) 26.10 24.37 24.81
High stock price for the quarter 27.05 25.55 27.44
Low stock price for the quarter 22.00 22.15 21.56
Net Interest Income Ratios
Yield on earning assets 7.91 % 8.26 8.64
Cost of interest-bearing
liabilities 4.00 4.45 5.14
Net interest margin 4.43 4.40 4.17
Interest rate spread 3.91 3.81 3.50
Other Period-End Information
Number of offices 393 379 377
Intangible assets:
Goodwill $909,541 910,421 922,481
Deposit base premium 249,035 258,042 273,665
Mortgage servicing rights 6,009 6,590 7,139
Cash dividends 30,687 26,706 26,774
As Of And For The Three Months
Ended
Allowance For Loan Losses 12/31/2000 09/30/2000
Beginning balance 143,510 62,061
Provision for loan losses 5,317 5,098
Additions from acquired institutions - 81,097
Recoveries 1,321 1,847
Charge-offs (6,534) (6,593)
Ending balance 143,614 143,510
Net charge-offs by loan type:
Commercial 432 781
Construction and commercial real
estate 23 12
Secured by real estate 631 675
Consumer 3,485 2,894
Revolving credit 634 421
Lease financing 8 (37)
Total net charge-offs 5,213 4,746
Non-Performing and Risk Assets
Nonaccrual loans 7,219 26,432
Foreclosed real estate 5,652 3,219
Total nonperforming assets 12,871 29,651
Restructured loans 2,232 2,235
Ninety days past due and accruing 26,362 7,949
Total risk assets 41,465 39,835
Asset Quality Ratios
Total risk assets to:
Net loans .38 .37
Total assets .23 .23
Loan loss allowance to total risk
assets 3.46 3.60
Net charge-offs to average loans
(annualized) .19 .18
Loan loss allowance to total loans 1.30 1.32
Share and Per Share Data
Common shares outstanding 205,246,098 205,186,627
Weighted average shares outstanding:
Basic 205,334,106 205,458,341
Diluted 207,800,709 207,268,076
Cash dividends .13 .13
Book value 11.52 11.64
Closing stock price (6) 24.75 19.94
High stock price for the quarter 25.19 20.13
Low stock price for the quarter 17.65 15.25
Net Interest Income Ratios
Yield on earning assets 8.83 9.01
Cost of interest-bearing liabilities 5.42 5.52
Net interest margin 4.12 4.20
Interest rate spread 3.41 3.49
Other Period-End Information
Number of offices 378 380
Intangible assets:
Goodwill 934,467 946,527
Deposit base premium 287,707 303,168
Mortgage servicing rights 7,688 8,237
Cash dividends 26,689 26,728
NATIONAL COMMERCE FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Nine Months Ended September 30
Income Statement 2001 2000
Loan income (TE) $729,487 440,373
Securities income (TE) 224,407 170,979
Other interest income (TE) 3,619 8,984
Total interest income (TE) 957,513 620,336
Savings/NOW and money market expense 91,350 62,037
Jumbo and brokered CD expense 67,889 77,498
Consumer time deposit expense 186,984 88,748
Interest expense on deposits 346,223 228,283
Short-term borrowed funds expense 34,011 51,728
FHLB advances expense 72,690 50,327
Long-term debt expense 1,934 832
Total interest expense 454,858 331,170
Net interest income (TE) 502,655 289,166
Taxable equivalent adjustment 21,910 16,433
Net interest income 480,745 272,733
Provision for loan losses 22,307 11,139
Net interest income after provision 458,438 261,594
Service charges on deposits 87,389 42,703
Other service charges and fees 27,227 20,096
Trust and employee benefit plan
income 38,686 18,987
Broker/dealer revenue and other
commissions 46,382 18,065
Other 28,660 15,744
Investment securities gains (losses) 3,883 4,650
Total noninterest income 232,227 120,245
Personnel 180,410 99,510
Occupancy 28,091 17,590
Equipment 18,369 10,104
Goodwill amortization 36,180 14,824
Core deposit amortization 44,053 19,075
Other 115,051 64,974
Losses on interest rate swaps (1) 672 20,006
Conversion/merger expenses (2) 3,122 44,765
Total noninterest expense 425,948 290,848
Income before income taxes 264,717 90,991
Income taxes 99,281 37,269
GAAP net income 165,436 53,722
Amortization of goodwill and core
deposit, net of tax 63,052 26,460
Cash net income (3) 228,488 80,182
Non-recurring items, after-tax (1) (2) 1,904 47,097
Operating cash earnings (3) $230,392 127,279
GAAP Earnings Per Share
and Ratios
Operating GAAP earnings (1) (2) (3):
Basic earnings per share $.82 .71
Diluted earnings per share .81 .71
Return on average tangible assets (3) 1.36 % 1.32
Return on average tangible equity (3) 18.30 18.46
GAAP net income:
Basic earnings per share $.81 .38
Diluted earnings per share .80 .38
Return on average tangible assets (3) 1.34 % .71
Return on average tangible equity (3) 18.09 9.84
Return on average assets 1.25 .67
Return on average equity 9.18 5.85
NATIONAL COMMERCE FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Nine Months Ended September 30
Cash Earnings Per Share and
Ratios 2001 2000
Operating cash
earnings (1) (2) (3):
Basic earnings per share $1.12 .90
Diluted earnings per
share 1.11 .89
Return on average tangible
assets (3) 1.87 % 1.67
Return on average
tangible equity (3) 25.19 23.31
Cash net income (3):
Basic earnings
per share $1.11 .57
Diluted earnings per
share 1.10 .56
Return on average
tangible assets (3) 1.85 % 1.05
Return on average
tangible equity (3) 24.98 14.68
Average tangible equity to
average tangible assets (3) 7.41 7.17
As of September 30 YTD Averages
Balance
Sheet Data 2001 2000 2001 2000
Assets $18,481,554 17,665,793 17,696,543 10,666,900
Tangible assets
(3) 17,322,978 16,416,098 16,508,906 10,169,055
Loans (all
domestic) (4):
Commercial 2,782,210 2,577,628 2,700,536 1,549,013
Construction
and
commercial
real estate 3,163,634 2,710,421 2,971,193 1,040,989
Mortgage 1,750,961 1,793,208 1,792,218 910,301
Consumer 3,619,187 3,585,154 3,524,272 2,663,120
Revolving
credit 61,902 70,930 61,520 27,619
Lease
financing 138,757 128,960 133,847 61,844
Total loans 11,516,651 10,866,301 11,183,586 6,252,886
Available for
sale securities 2,794,233 2,406,954 -- --
Held to maturity
securities -
book value 1,489,414 1,954,463 -- --
Total investment
securities (5) 4,283,647 4,361,417 4,132,245 3,091,667
Trading
securities 131,374 41,879 59,529 35,074
Earning assets
(5) 15,975,297 15,492,349 15,471,233 9,569,993
Goodwill 909,541 946,527 919,791 378,905
Core deposit
premium 249,035 303,168 267,846 118,940
Deposits:
Demand deposits
(noninterest-
bearing) 1,564,212 1,364,830 1,398,349 775,154
Savings/NOW
and money market
accounts 4,834,686 4,335,019 4,546,759 2,496,589
Jumbo and
brokered CD's 1,329,640 2,100,068 1,741,864 1,712,792
Consumer time
deposits 4,216,670 3,903,572 4,197,296 1,934,934
Total
deposits 11,945,208 11,703,489 11,884,268 6,919,469
Short-term
borrowed funds 1,308,386 1,345,004 1,070,108 1,160,313
FHLB advances 2,243,509 1,786,181 1,839,466 1,090,271
Long-term debt 39,375 39,087 39,378 16,983
Interest-bearing
liabilities 13,972,267 13,508,930 13,434,871 8,411,882
Stockholders'
equity 2,414,864 2,389,157 2,410,397 1,227,228
Fair value
adjustment for
FAS 115 included
in stockholders'
equity 33,099 1,220 25,736 (7,030)
Tangible
stockholders'
equity (3) 1,256,288 1,139,462 1,222,760 729,383
Nine Months Ended September 30
Allowance For Loan
Losses 2001 2000
Beginning balance $143,614 59,597
Provision for
loan losses 22,307 11,139
Addition from
acquired
institutions 1,331 82,228
Recoveries 5,360 3,695
Charge-offs (22,125) (13,149)
Ending balance $150,487 143,510
Net charge-offs
to average loans
(annualized) .20 % .20
NATIONAL COMMERCE FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Nine Months Ended September 30
Cash Efficiency Ratios 2001 2000
As a percentage of average tangible
assets (3) (excluding
non-recurring items (1) (2) and
amortization of intangibles):
Noninterest income 1.88 % 1.58
Personnel expense 1.46 1.31
Occupancy and equipment expense .38 .36
Other operating expense .94 .85
Noninterest expense 2.78 2.52
Net overhead (noninterest
expense - noninterest income) .90 % .94
Noninterest expense as a percentage
of net interest
income (TE) and other income
(excluding non-recurring
items (1) (2) and amortization of
intangibles) 46.62 % 46.94
Share and Per Share Data
Weighted average shares outstanding:
Basic 205,119,550 141,288,526
Diluted 207,712,220 142,954,184
Cash dividends per share $.41 .35
Net Interest Income Ratios
Yield on earning assets 8.27 % 8.65
Cost of interest-bearing liabilities 4.53 5.26
Net interest margin 4.34 4.03
Interest rate spread 3.74 3.39
(1) Certain swap contracts that the Corporation entered into during 2000
did not qualify for hedge accounting and were marked to
market through the income statement instead of other comprehensive
gains and losses. These swap contracts were terminated in the
first quarter of 2001. The losses on swap contracts incurred in 2000
are considered to be non-recurring expenses.
(2) Merger and conversion expenses incurred in the third quarter of 2001
were related to the Corporation's acquisition of First Vantage and
pending acquisitions of SouthBanc and the divested branches of
Wachovia and in the third and fourth quarters of 2000
($34.7 million and $15.8 million, respectively, after-tax) were
related to the Corporation's merger with CCB Financial Corporation.
These expenses are considered to be non-recurring.
(3) The Corporation defines cash net income as GAAP net income adjusted
for the after-tax impact of goodwill and core deposit
amortization. Operating GAAP earnings and operating cash earnings,
respectively, are defined as GAAP net income and cash net
income, adjusted for the after-tax cash impact of non-recurring
expenses discussed in (1) and (2) above. Average tangible assets and
equity for the periods are determined as average total assets or
stockholders' equity, respectively, less average unamortized goodwill
and core deposit premium.
(4) Loan balances by category are presented in accordance with the
Corporation's internal classification system which uses the purpose of
the borrowing to determine the reporting category.
(5) Average balances exclude the mark to market adjustment for Statement
of Accounting Standards No. 115.
(6) NYSE symbol: NCF
NATIONAL COMMERCE FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis
Three Months Ended September 30, 2001 and 2000
(Taxable Equivalent Basis-In Thousands) (1)
2001
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans (2) $11,370,853 237,958 8.31 %
U.S. Treasury and agency obligations
(3) 3,034,442 51,553 6.79
States and political subdivision
obligations 157,226 3,463 9.24
Other securities 911,581 16,000 7.02
Trading securities 54,379 594 4.37
Federal funds sold and other short-
term investments 52,369 491 3.72
Time deposits in other banks 29,021 299 4.09
Total earning assets (3) 15,609,871 310,358 7.91
Non-earning assets:
Cash and due from banks 425,874
Premises and equipment 203,270
Goodwill 911,204
Core deposit premium 253,732
All other assets, net 495,667
Total assets $17,899,618
Interest-bearing liabilities:
Savings and time deposits $10,386,353 102,057 3.90 %
Short-term borrowed funds 1,047,314 8,602 4.34
FHLB advances 2,090,236 25,586 4.86
Long-term debt 39,376 646 6.58
Total interest-bearing
liabilities 13,563,279 136,891 4.00
Other liabilities and stockholders'
equity:
Demand deposits 1,491,593
Other liabilities 386,222
Capital trust pass-through securities 42,640
Stockholders' equity 2,415,884
Total liabilities and
stockholders' equity $17,899,618
Net interest income and net interest
margin (4) $173,467 4.43 %
Interest rate spread (5) 3.91 %
(1) The taxable equivalent basis is computed using 35% federal and
applicable state tax rates in 2001 and 2000.
(2) The average loan balances include non-accruing loans. Loan fees of
$4,992,000 and $3,806,000 for 2001 and 2000, respectively, are
included in interest income.
(3) The average balances for debt and equity securities exclude the
effect of their mark-to-market adjustment, if any.
(4) Net interest margin is computed by dividing net interest income by
total earning assets.
(5) Interest rate spread equals the earning asset yield minus the
interest-bearing liability rate.
2000
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans (2) 10,469,060 253,399 9.64
U.S. Treasury and agency obligations
(3) 3,237,725 60,609 7.49
States and political subdivision
obligations 188,746 3,812 8.08
Other securities 729,463 14,560 7.98
Trading securities 40,187 668 6.65
Federal funds sold and other short-
term investments 185,855 3,081 6.60
Time deposits in other banks 47,860 783 6.50
Total earning assets (3) 14,898,896 336,912 9.01
Non-earning assets:
Cash and due from banks 376,580
Premises and equipment 193,787
Goodwill 911,137
Core deposit premium 300,926
All other assets, net 397,008
Total assets 17,078,334
Interest-bearing liabilities:
Savings and time deposits 10,009,798 132,028 5.25
Short-term borrowed funds 1,411,844 21,934 6.20
FHLB advances 1,532,451 25,643 6.66
Long-term debt 37,952 648 6.86
Total interest-bearing
liabilities 12,992,045 180,253 5.52
Other liabilities and stockholders'
equity:
Demand deposits 1,282,276
Other liabilities 413,713
Capital trust pass-through securities 49,917
Stockholders' equity 2,340,383
Total liabilities and
stockholders' equity 17,078,334
Net interest income and net interest
margin (4) 156,659 4.20
Interest rate spread (5) 3.49
(1) The taxable equivalent basis is computed using 35% federal and
applicable state tax rates in 2001 and 2000.
(2) The average loan balances include non-accruing loans. Loan fees of
$4,992,000 and $3,806,000 for 2001 and 2000, respectively, are
included in interest income.
(3) The average balances for debt and equity securities exclude the
effect of their mark-to-market adjustment, if any.
(4) Net interest margin is computed by dividing net interest income by
total earning assets.
(5) Interest rate spread equals the earning asset yield minus the
interest-bearing liability rate.
NATIONAL COMMERCE FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis
Nine Months Ended September 30, 2001 and 2000
(Taxable Equivalent Basis-In Thousands) (1)
2001
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans (2) $11,183,586 729,487 8.72 %
U.S. Treasury and agency obligations
(3) 2,939,998 157,940 7.17
States and political subdivision
obligations 169,463 9,275 7.35
Equity securities and other
securities (3) 1,022,784 54,879 7.15
Trading account securities 59,529 2,313 5.18
Federal funds sold and other short-
term investments 68,398 2,609 5.10
Time deposits in other banks 27,475 1,010 4.92
Total earning assets 15,471,233 957,513 8.27
Non-earning assets:
Cash and due from banks 391,440
Premises and equipment 203,873
Goodwill 919,791
Core deposit premium 267,846
All other assets, net 442,360
Total assets $17,696,543
Interest-bearing liabilities:
Savings and time deposits $10,485,919 346,223 4.41 %
Short-term borrowed funds 1,070,108 34,011 4.34
FHLB advances 1,839,466 72,690 5.28
Long-term debt 39,378 1,934 6.58
Total interest-bearing
liabilities 13,434,871 454,858 4.53
Other liabilities and stockholders'
equity:
Demand deposits 1,398,349
Other liabilities 407,913
Capital trust pass-through securities 45,013
Stockholders' equity 2,410,397
Total liabilities and
stockholders' equity $17,696,543
Net interest income and net interest
margin (4) $502,655 4.34 %
Interest rate spread (5) 3.74 %
(1) The taxable equivalent basis is computed using 35% federal and
applicable state tax rates in 2001 and 2000.
(2) The average loan balances include non-accruing loans. Loan fees of
$15,783,000 and $9,229,000 for 2001 and 2000, respectively, are
included in interest income.
(3) The average balances for debt and equity securities exclude the effect
of their mark-to-market adjustment, if any.
(4) Net interest margin is computed by dividing net interest income by
total earning assets.
(5) Interest rate spread equals the earning asset yield minus the
interest-bearing liability rate.
2000
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans (2) 6,252,886 440,373 9.40
U.S. Treasury and agency obligations
(3) 2,234,642 138,501 7.13
States and political subdivision
obligations 148,785 5,212 8.12
Equity securities and other
securities (3) 708,240 26,250 7.68
Trading account securities 35,074 1,016 6.40
Federal funds sold and other short-
term investments 166,582 4,995 6.48
Time deposits in other banks 23,784 3,989 5.11
Total earning assets 9,569,993 620,336 8.65
Non-earning assets:
Cash and due from banks 252,282
Premises and equipment 97,925
Goodwill 378,905
Core deposit premium 118,940
All other assets, net 248,855
Total assets 10,666,900
Interest-bearing liabilities:
Savings and time deposits 6,144,315 228,283 4.96
Short-term borrowed funds 1,160,313 51,728 5.97
FHLB advances 1,090,271 50,327 6.17
Long-term debt 16,983 832 6.58
Total interest-bearing
liabilities 8,411,882 331,170 5.26
Other liabilities and stockholders'
equity:
Demand deposits 775,154
Other liabilities 202,722
Capital trust pass-through securities 49,914
Stockholders' equity 1,227,228
Total liabilities and
stockholders' equity 10,666,900
Net interest income and net interest
margin (4) 289,166 4.03
Interest rate spread (5) 3.39
(1) The taxable equivalent basis is computed using 35% federal and
applicable state tax rates in 2001 and 2000.
(2) The average loan balances include non-accruing loans. Loan fees of
$15,783,000 and $9,229,000 for 2001 and 2000, respectively, are
included in interest income.
(3) The average balances for debt and equity securities exclude the effect
of their mark-to-market adjustment, if any.
(4) Net interest margin is computed by dividing net interest income by
total earning assets.
(5) Interest rate spread equals the earning asset yield minus the
interest-bearing liability rate.
SOURCE National Commerce Financial Corporation
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Related links:
http://www.ncfcorp.com
CONTACT:
Eileen M. Sarro, +1-919-683-7642, or M.J.A.
"Jekka" Pinckney, +1-901-523-3525, both of National Commerce
Financial Corporation
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