TRANSMITTAL LETTER
Central Fidelity Banks, Inc.
1021 East Cary Street
Richmond, Virginia 23219
(804) 782-4000
May 12, 1995
BY EDGAR SYSTEM
- ---------------
Securities and Exchange Commission
450 Fifth Street
Washington, D. C. 20549-1004
Attn: Filing Desk
Re: Central Fidelity Banks, Inc. Form 10-Q Filing
---------------------------------------------
Ladies and Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of 1934,
we are transmitting herewith the attached Form 10-Q for the quarter
ended March 31, 1995.
Sincerely,
Central Fidelity Banks, Inc.
/s/ Vivian Y. Woo
Vivian Y. Woo
Vice President and Assistant Controller
Enclosure
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
Commission file number 0-8829
CENTRAL FIDELITY BANKS, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-1091649
(State of incorporation) (I.R.S. Employer
Identification No.)
1021 East Cary Street 23219
Richmond, Virginia (Zip Code)
(Address of principal executive offices)
(804) 782-4000
(Registrant's telephone number, including area code)
Central Fidelity Banks, Inc. (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
As of May 10, 1995, the latest practicable date, Central Fidelity
Banks, Inc. had 39,640,893 shares of its Common Stock outstanding. This
is the only class of outstanding shares.
<PAGE>
PART I
------
FINANCIAL INFORMATION
---------------------
CENTRAL FIDELITY BANKS, INC.
ITEM 1. FINANCIAL STATEMENTS
The consolidated balance sheet as of March 31, 1995 and 1994;
the statement of consolidated income for the three-month period
ended March 31, 1995 and 1994 and the statement of consolidated cash
flows for the three-month period ended March 31, 1995 and 1994 are
unaudited and do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
three-month period ended March 31, 1995 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1995. For further information, refer to the consolidated
financial statements and footnotes included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 which is the
source of the Company's balance sheet as of that date.
ACCOUNTING CHANGE
- -----------------
Change in Accounting Principles
- -------------------------------
On January 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for Impairment
of a Loan" (SFAS 114), as amended by SFAS 118. SFAS 114, as amended
by SFAS 118, requires that impaired loans within the scope of the
statements be presented in the financial statements at the present
value of expected future cash flows or at the fair value of the
loan's collateral.
At March 31, 1995, the recorded investment in loans which have
been identified as impaired loans, in accordance with SFAS 114,
totalled $65,935,000. Of this amount, $36,549,000 related to loans
with no valuation allowance, $29,386,000 related to loans with a
corresponding valuation allowance of $7,362,000.
For the quarter ended March 31, 1995, the average recorded
investment in impaired loans was approximately $68,633,000, and the
total interest income recognized on impaired loans was $446,000. Of
which $348,000 was recognized on a cash basis.
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEET
- -------------------------------------------------------------------------------------------------------
Central Fidelity Banks, Inc. and Subsidiaries
(In thousands, except share data)
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------
Cash and due from banks $262,743 $274,813
Temporary investments:
Federal funds sold and securities purchased
under agreements to resell 162,993 196,859
Trading account securities 552 1,417
- ---------------------------------------------------------------------- ----------- -----------
Total temporary investments 163,545 198,276
- ---------------------------------------------------------------------- ----------- -----------
Assets available for sale:
Securities 3,496,887 3,486,381
Loans 2,498 2,186
- ---------------------------------------------------------------------- ----------- -----------
Total assets available for sale 3,499,385 3,488,567
- ---------------------------------------------------------------------- ----------- -----------
Total loans 5,875,733 5,769,907
Allowance for loan losses (110,000) (110,000)
- ---------------------------------------------------------------------- ----------- -----------
Net loans 5,765,733 5,659,907
- ---------------------------------------------------------------------- ----------- -----------
Accrued interest receivable 58,708 59,933
Premises and equipment, net 146,956 147,177
Due from customers on acceptances 14,744 13,663
Other assets 165,015 211,836
- ---------------------------------------------------------------------- ----------- -----------
Total assets $10,076,829 $10,054,172
- ---------------------------------------------------------------------- =========== ===========
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEET (Continued)
<CAPTION>
LIABILITIES
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
Deposits:
Demand $918,632 $953,655
Savings and other time 6,133,071 6,026,393
Certificates of deposit $100,000 and over 238,498 247,196
- ---------------------------------------------------------------------- ----------- -----------
Total deposits 7,290,201 7,227,244
- ---------------------------------------------------------------------- ----------- -----------
Borrowings:
Federal funds purchased and securities sold
under agreements to repurchase 1,159,116 1,040,870
Other short-term borrowings 47,495 61,998
Medium-term notes 352,250 561,500
Federal Home Loan Bank borrowings 269,600 236,500
Long-term debt 150,418 150,440
Capitalized lease obligations 8,075 8,167
- ---------------------------------------------------------------------- ----------- -----------
Total borrowings 1,986,954 2,059,475
- ---------------------------------------------------------------------- ----------- -----------
Dividends payable 11,071 11,001
Accrued interest payable 35,462 36,211
Bank acceptances outstanding 14,744 13,663
Accounts payable and accrued liabilities 34,767 83,506
- ---------------------------------------------------------------------- ----------- -----------
Total liabilities 9,373,199 9,431,100
- ---------------------------------------------------------------------- ----------- -----------
SHAREHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------------------
Preferred stock, none issued -- --
Common stock, par value $5 per share, authorized
100,000,000 shares, shares issued: 39,543,285
and 39,324,228, respectively 197,716 196,621
Capital surplus 184,153 180,458
Retained earnings 362,868 348,219
- ---------------------------------------------------------------------- ----------- -----------
Total shareholders' equity before unrealized losses 744,737 725,298
- ---------------------------------------------------------------------- ----------- -----------
Unrealized losses on securities available for sale,
net of income taxes (41,107) (102,226)
- ---------------------------------------------------------------------- ----------- -----------
Total shareholders' equity 703,630 623,072
- ---------------------------------------------------------------------- ----------- -----------
Total liabilities and shareholders' equity $10,076,829 $10,054,172
- ---------------------------------------------------------------------- =========== ===========
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CONSOLIDATED INCOME
- ----------------------------------------------------------------------------------------------
Central Fidelity Banks, Inc. and Subsidiaries
(In thousands, except share and per share data)
<CAPTION>
For the three months
ended March 31,
1995 1994
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
Income From Earning Assets
- ----------------------------------------------------------------------------------------------
Interest and fees on loans $125,417 $99,599
Interest on securities available for sale 58,685 53,890
Interest on loans available for sale 33 367
Interest on money market investments 1,309 667
Interest on trading account securities 18 12
- ------------------------------------------------------------------- ------- -------
Total income from earning assets 185,462 154,535
- ------------------------------------------------------------------- ------- -------
Interest Expense
- ----------------------------------------------------------------------------------------------
Interest on deposits 72,671 54,348
Interest on federal funds purchased and securities
sold under agreements to repurchase 14,962 9,676
Interest on other short-term borrowings 727 221
Interest on medium-term notes 6,703 4,310
Interest on Federal Home Loan Bank borrowings 4,276 --
Interest on long-term debt 2,822 1,787
Interest on capitalized lease obligations 179 187
- ------------------------------------------------------------------- ------- -------
Total interest expense 102,340 70,529
- ------------------------------------------------------------------- ------- -------
Net interest income 83,122 84,006
Provision for loan losses 5,304 10,117
- ------------------------------------------------------------------- ------- -------
Net income from earning assets 77,818 73,889
- ------------------------------------------------------------------- ------- -------
Noninterest Income
- ----------------------------------------------------------------------------------------------
Trust income 3,423 3,589
Deposit fees and charges 8,526 8,409
Profits on securities available for sale and
trading account securities 516 6,784
Other income 5,668 16,913
- ------------------------------------------------------------------- ------- -------
Total noninterest income 18,133 35,695
- ------------------------------------------------------------------- ------- -------
Noninterest Expense
- ----------------------------------------------------------------------------------------------
Personnel expense 32,931 32,122
Occupancy and equipment expense 10,401 11,176
FDIC insurance expense 3,903 3,728
Other real estate expense 521 6,303
Other expense 10,671 12,734
- ------------------------------------------------------------------- ------- -------
Total noninterest expense 58,427 66,063
- ------------------------------------------------------------------- ------- -------
Earnings
- ----------------------------------------------------------------------------------------------
Income before income taxes 37,524 43,521
Income tax expense 11,804 14,230
- ------------------------------------------------------------------- ------- -------
Net income $25,720 $29,291
- ------------------------------------------------------------------- ======= =======
Earnings Per Share
- ----------------------------------------------------------------------------------------------
Net income $0.65 $0.75
Average shares outstanding 39,457,407 39,054,284
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CONSOLIDATED CASH FLOWS
- ------------------------------------------------------------------------------------------------------------------
Central Fidelity Banks, Inc. and Subsidiaries
(In thousands) For the three months ended March 31,
<CAPTION>
1995 1994
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
- ------------------------------------------------------------------------------------------------------------------
Net income $25,720 $29,291
Adjustments to reconcile net income to net cash used by operating activities:
Provision for loan losses 5,304 10,117
Depreciation of premises and equipment 3,949 3,817
Net amortization of premium and accretion of discount on
securities available for sale (2,012) 1,543
Gains on securities available for sale (633) (7,377)
Deferred income taxes 2,466 (4,392)
Decrease in trading account securities 865 243
(Increase) decrease in loans available for sale (312) 32,945
Decrease in accrued interest receivable 1,225 4,570
Decrease in accrued interest payable (749) (1,181)
Other, net (36,128) (81,218)
- --------------------------------------------------------------------------------------- ---------- ----------
Net cash used by operating activities (305) (11,642)
- --------------------------------------------------------------------------------------- ---------- ----------
INVESTING ACTIVITIES
- ------------------------------------------------------------------------------------------------------------------
Purchases of securities available for sale (149,788) (572,418)
Proceeds from sales of securities available for sale 173,356 723,975
Proceeds from maturities and repayments of securities available for sale 62,601 210,685
Net increase in loans (112,959) (221,297)
Purchases of premises and equipment (3,769) (3,470)
Proceeds from the disposition of premises and equipment 20 163
Proceeds from the disposition of foreclosed properties 682 3,798
- --------------------------------------------------------------------------------------- ---------- ----------
Net cash provided (used) by investing activities (29,857) 141,436
- --------------------------------------------------------------------------------------- ---------- ----------
FINANCING ACTIVITIES
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in demand, interest checking and regular savings deposits (72,831) 7,404
Net increase (decrease) in consumer certificates 132,807 (10,933)
Net increase in money market accounts 11,679 9,923
Net decrease in certificates of deposit $100,000 and over (8,698) (154,265)
Net increase (decrease) in short-term borrowings 103,743 (48,749)
Payments on medium-term notes (209,250) --
Proceeds from FHLB borrowings 33,100 --
Proceeds from long-term debt -- 100
Payments on long-term debt and capitalized lease obligations (114) (105)
Proceeds from issuance of common stock 4,790 716
Cash dividends (11,000) (9,752)
- --------------------------------------------------------------------------------------- ---------- ----------
Net cash used by financing activities (15,774) (205,661)
- --------------------------------------------------------------------------------------- ---------- ----------
Decrease in cash and cash equivalents (45,936) (75,867)
Cash and cash equivalents at beginning of year 471,672 457,662
- --------------------------------------------------------------------------------------- ---------- ----------
Cash and cash equivalents at end of period 425,736 381,795
- --------------------------------------------------------------------------------------- ========== ==========
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CENTRAL FIDELITY BANKS, INC.
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The purpose of this discussion is to address information about
the Company's financial condition and results of operations which is
not otherwise apparent from the consolidated financial statements and
tables included in this report. Reference should be made to those
statements and tables and other selected financial data presented
elsewhere in this report for an understanding of the following
discussion and analysis.
Results of Operations
- ---------------------
Net income for the first three months of 1995 was $25.7 million,
12.2% lower than the $29.3 million earned in the first three months
of 1994. On a per share basis, net income declined 13.3% to $.65
from $.75. The declines in net income and net income per share were
due primarily to higher funding costs which resulted from the
continued increases in interest rates.
On a tax-equivalent basis, net interest income for the three
months was $85.1 million, a 1.0% decline from the $86.0 million
earned in the corresponding 1994 period. The net interest margin was
3.64% for the three months ended March 31, 1995, down thirty-nine
basis points from 4.03% during the same period in 1994. The declines
in net interest income and net interest margin during the three-month
period were impacted by the higher than anticipated interest rates
which lowered net interest income and net interest margin due to
higher funding costs. While average earning assets and income earned
on the earning assets grew $827.0 million, or 9.6% and $30.9 million,
or 19.8%, respectively, over 1994, average interest-bearing
liabilities and interest expense on these liabilities increased
$743.2 million, or 9.8%, and $31.8 million, or 45.1%, respectively.
The cost of interest-bearing liabilities was up 122 basis points when
compared with the 68 basis points increase in the yield on average
earning assets. Management is optimistic that the ongoing
restructuring of the balance sheet will reduce the Company's exposure
to continued interest rate increases and will have a positive effect
on future earnings and interest margins.
The provision for loan losses was $5.3 million for the three
months ended March 31, 1995 compared with $10.1 million recorded for
the corresponding period in 1994. The decline in the provision is
consistent with comparable declines in the charge-offs from period to
period.
Noninterest income totalled $18.1 million for the first three
months of 1995 compared with $35.7 million for the 1994 level,
representing a decline of 49.2%. The decline in noninterest income
was primarily driven by two significant nonrecurring items in 1994.
During the first quarter of 1994, the Company recognized $6.4 million
profits from the sale of securities and $11.4 million gain on the
sale of out-of-state affinity credit card portfolio. Excluding these
two items, noninterest income increased 1.9% in 1995.
Noninterest expense for the first three months of 1995 declined
11.6% to $58.4 million compared to the same period in 1994. The
decline was due primarily to $8.6 million in several nonrecurring
charges in the first quarter of 1994. These charges included the
recognition of certain postemployment costs; the write-off of various
software systems and charges to reflect appraised values of other
real estate owned. Absent these nonrecurring charges, noninterest
expense was up 1.7% in 1995.
Balance Sheet
- -------------
Total assets as of March 31, 1995 were $10.1 billion, flat from
year-end 1994's level. Total loans at March 31, 1995 were $5.9
billion, or 1.8% higher than at December 31, 1994, representing
growth primarily in consumer loan categories. Total deposits were
$7.3 billion at March 31, 1995, an increase of .9% from December 31,
1994, reflecting growth in retail certificates of deposit as a result
of higher mid-term rates. Shareholders' equity at March 31, 1995 was
$744.7 million, or 7.4% of total assets. At December 31, 1994,
shareholders' equity was $725.3 million, or 7.2% of total assets. The
book value per share grew 2.1% from $18.44 at December 31, 1994 to
$18.83 at March 31, 1995.
The return on average total assets during the first three months
of 1995 was 1.03% compared to 1.28% for the comparable 1994 period.
The return on average shareholders' equity was 14.01% versus 16.98%
in 1994.
Asset Quality
- -------------
Nonperforming assets as of March 31, 1995 were $82.9 million, or
.82% of total assets, compared to $90.3 million or .90% at December
31, 1994 and $117.7 million or 1.27% of total assets at March 31,
1994. At March 31, 1995, nonperforming assets were 1.41% of loans and
foreclosed properties, compared to 1.56% at December 31, 1994 and
2.34% at March 31, 1994. The lower level of nonperforming assets was
a result of overall improved credit quality of loan portfolio.
The allowance for loan losses remained at $110.0 million for
periods ended March 31, 1995, December 31, 1994 and March 31, 1994.
At March 31, 1995, the allowance for loan losses was 1.87% of loans,
compared to 1.91% at December 31, 1994 and 2.20% at March 31, 1994.
At March 31, 1995, the allowance for loan losses to nonperforming
assets was 132.65%, compared to 121.82% at December 31, 1994 and
93.48% at March 31, 1994. Net loan charge-offs for the three months
ended March 31, 1995 were $5.3 million, representing .37% of average
loans on an annualized basis compared to $8.0 million or .57% for the
three months ended December 31, 1994 and $5.1 million or .42% for the
three months ended March 31, 1994.
The allowance for loan losses represents management's estimate
of an amount adequate to absorb potential future losses inherent in
the loan portfolio. In assessing the adequacy of the allowance,
management relies predominately on its ongoing review of the lending
process and the risk characteristics of the portfolio in the
aggregate. Among other factors, management considers the Company's
loan loss experience, the amount of past-due and nonperforming loans,
current and anticipated economic conditions, and the estimated
current values of collateral securing loans in assessing the level of
the allowance for loan losses.
While it is the Company's policy to charge off in the current
period loans for which a loss is considered probable, there are
additional risks of future losses which cannot be quantified
precisely or attributed to particular loans or classes of loans.
Because these risks include the state of the economy as well as
conditions affecting individual borrowers, management's judgment of
the allowance is necessarily approximate and imprecise. It is also
subject to regulatory examinations and determinations as to its
adequacy.
Capital Resources
- -----------------
The Company's risk-based capital and leverage ratios exceeded
the Federal Reserve's minimum guidelines at March 31, 1995. At March
31, 1995, the Company's total risk-based capital was $949.4 million,
as compared to $928.4 million at year-end 1994 and $891.5 million at
March 31, 1994. The ratio of total risk-based capital to
risk-weighted assets was 14.00% at March 31, 1995 compared to 13.85%
and 15.01% at December 31, 1994 and March 31, 1994, respectively. At
March 31, 1995, the Company's leverage ratio was 7.21%, compared to
7.04% at December 31, 1994 and 7.31% at March 31, 1994. At March 31,
1995, the Bank's total risk-based capital and leverage ratios were
13.28% and 6.72%, respectively.
The data related to shareholders' equity, book value, returns on
average total assets and average shareholders' equity and capital
ratios mentioned herein are computed without giving affect to the
adjustment to shareholders' equity required by Statement No. 115 of
the Financial Accounting Standards Board.
Off-Balance-Sheet Derivatives
- -----------------------------
The Company employed financial derivatives in its strategy of
increasing liability sensitivity, which boosted earnings in an
environment of declining interest rates. The Company entered into
interest rate swaps to receive a fixed rate of interest and pay a
variable rate. In the implementation of this strategy, the use of
off-balance-sheet derivatives was limited compared to the size of
various on-balance-sheet instruments, namely fixed rate securities
and short-term borrowings, which were the predominant vehicles for
pursuing liability sensitivity.
Market values of derivatives transactions fluctuate based upon
movements in the underlying financial indices such as interest rates.
Market values are monitored on a monthly basis through external
pricing mechanisms and then tested by using internal calculations.
The Company's objective measurement system together with risk limits
and timely reporting to senior management help to mitigate the
possibility of any gain or loss recognition on the Company's interest
rate swaps. In the event that a derivative product were terminated
prior to its contractual maturity, it is the Company's policy to
recognize the resulting gain or loss over the remaining life of the
underlying hedged asset or liability.
Financial derivatives may expose the Company to credit risk to
the extent of the fair value gain of an instrument, should the
counterparty default on its obligation to perform. The Company
seeks to reduce credit risk by dealing only with highly rated
counterparties and by setting exposure limits based on independent
industry ratings from the major rating agencies and other relevant
criteria. Furthermore, the Company uses bilateral netting
agreements and collateral arrangements to reduce credit risk.
Collateral is delivered by either party when the fair value of the
transaction exceeds established thresholds of credit risk.
The Company has also entered into a small number of interest
rate swap agreements to accommodate the needs of commercial
customers. In order to offset the interest rate risk of customer
swaps, the Company has executed offsetting transactions with third
parties.
The Company intends to continue using off-balance-sheet
financial derivatives as a limited end-user in the prudent
management of interest rate sensitivity.
Change in Accounting Principles
- -------------------------------
See Item 1. Financial Statements herein.
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
Summary of Interest Rate Swaps
The weighted average variable rates are based upon the contractual rates in effect at March 31, 1995:
(In thousands) March 31, 1995
<CAPTION>
Notional Weighted Average Rate Maturity Interest Unrecognized
Amount Receive Pay In Years Income/(Expense) Gains (Losses)
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Company Hedging Swaps
- --------------------------------------------------------------------------------------------------------------------------
Pay fixed/receive variable:
Variable rate deposits $50,000 5.82%(1) 4.98% 0.29 $120 $136
Variable rate medium-term borrowings 50,000 6.25 (2) 6.42 2.21 (13) 644
Fixed rate commercial loans 26,321 6.28 (2) 6.83 4.43 (48) 173
- ---------------------------------------- -------- ------ -------
Total pay fixed/receive variable 126,321 6.09 5.94 1.91 59 953
- ---------------------------------------- -------- ------ -------
Pay variable/receive fixed:
Fixed rate subordinated debt 150,000 7.10 6.31 (2) 7.63 275 (2,874)
Fixed rate medium-term borrowings 340,000 4.85 6.31 (2) 1.43 (1,132) (7,167)
Variable rate commercial loans 100,000 4.77 6.31 (2) 1.81 (865) (4,277)
- ---------------------------------------- -------- ------ -------
Total pay variable/receive fixed 590,000 5.41 6.31 3.07 (1,722) (14,318)
- ---------------------------------------- -------- ------ -------
Total company hedging swaps $716,321 5.53% 6.24% 2.87 ($1,663) ($13,365)
- ---------------------------------------- ======== ====== =======
- --------------------------------------------------------------------------------------------------------------------------
Customer Hedging Swaps
- --------------------------------------------------------------------------------------------------------------------------
Pay fixed/receive variable $9,000 6.15%(2) 6.87% 2.02 -- ($284)
Pay variable/receive fixed 9,000 6.92 6.15 (2) 2.02 -- 317
- ---------------------------------------- -------- ------ -------
Total customer hedging swaps $18,000 6.54% 6.51% 2.02 $1 $33
- ---------------------------------------- ======== ====== =======
- --------------------------------------------------------------------------------------------------------------------------
(1) Variable rate is tied to U.S. Treasury bill rate.
(2) Variable rate is tied to London Inter-Bank Offered Rate (LIBOR) with
designated 3-month maturity.
</TABLE>
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
Interest Rate Swaps - Notional Amount Rollforward
Pay fixed/ Pay variable/ Total
(In thousands) March 31, 1995 receive receive All
<CAPTION> variable fixed Swaps
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Notional Amount
- -------------------------------------------------------------------------------------------------------------------------
Company Swaps:
Beginning balance, January 1, 1995 $126,548 $850,000 $976,548
New swaps -- -- --
Terminated swaps -- -- --
Matured swaps -- (200,000) (200,000)
Amortization of swaps (227) (60,000) (60,227)
- ------------------------------------------ -------- -------- ----------
Ending balance, March 31, 1995 $126,321 $590,000 $716,321
- ------------------------------------------ ======== ======== ==========
Customer Swaps:
Beginning balance, January 1, 1995 $9,000 $9,000 $18,000
New swaps -- -- --
Terminated swaps -- -- --
Matured swaps -- -- --
Amortization of swaps -- -- --
- ------------------------------------------ -------- -------- ----------
Ending balance, March 31, 1995 $9,000 $9,000 $18,000
- ------------------------------------------ ======== ======== ==========
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
Expected Maturities of Interest Rate Swaps
<CAPTION>
Due After One After Two After Three After Four
Within Through Through Through Through After
(In thousands) March 31, 1995 One Year Two Years Three Years Four Years Five Years Five Years Total
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Company Hedging Swaps
- -----------------------------------------------------------------------------------------------------------------------
Pay fixed/receive variable:
Notional amount $53,390 $1,015 $55,952 $2,451 $12,185 $1,328 $126,321
Weighted average pay rate 5.01% 6.83% 6.46% 6.83% 6.83% 7.03% 5.94%
Weighted average receive rate:
Contractual rate * 5.85% 6.28% 6.25% 6.28% 6.28% 6.31% 6.09%
Forward yield curve ** 5.93% 6.69% 6.80% 6.96% 7.06% 7.18% 6.46%
Receive fixed/pay variable:
Notional amount $100,000 $240,000 $100,000 -- -- $150,000 $590,000
Weighted average pay rate:
Contractual rate * 6.31% 6.30% 6.31% -- -- 6.31% 6.31%
Forward yield curve ** 6.33% 6.68% 6.88% -- -- 7.38% 6.83%
Weighted average receive rate 4.23% 4.77% 5.59% -- -- 7.10% 5.41%
- -----------------------------------------------------------------------------------------------------------------------
Customer Hedging Swaps
- -----------------------------------------------------------------------------------------------------------------------
Pay fixed/receive variable:
Notional amount -- $5,000 -- $4,000 -- -- $9,000
Weighted average pay rate -- 4.71% -- 9.57% -- -- 6.87%
Weighted average receive rate:
Contractual rate * -- 6.19% -- 6.11% -- -- 6.15%
Forward yield curve ** -- 6.60% -- 6.91% -- -- 6.74%
Receive fixed/pay variable:
Notional amount -- $5,000 -- $4,000 -- -- $9,000
Weighted average pay rate:
Contractual rate * -- 6.19% -- 6.11% -- -- 6.15%
Forward yield curve ** -- 6.60% -- 6.91% -- -- 6.74%
Weighted average receive rate -- 4.76% -- 9.62% -- -- 6.92%
- -----------------------------------------------------------------------------------------------------------------------
* The weighted average variable rates are based upon the contractual rates in effect at March 31, 1995.
** The weighted average variable rates are projected based upon the implied forward yield curve from date of analysis
through maturity.
</TABLE>
<PAGE>
PART II
-------
OTHER INFORMATION
-----------------
CENTRAL FIDELITY BANKS, INC.
ITEM 6. Exhibits and Reports on Form 8-K.
A. Exhibits:
11. Statement re computation of per share earnings -
filed herewith.
B. Reports on Form 8-K:
Report on Form 8-K was filed on February 7, 1995, reporting that
the Company planned to acquire approximately $465 million in deposits
from Household Bank, f.s.b., a subsidiary of Household International,
Inc. This transaction, includes 14 Household branches located in the
Northern Virginia, is expected to be completed in June, 1995.
<PAGE>
<TABLE>
EXHIBIT 11
CENTRAL FIDELITY BANKS, INC. AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(In Thousands)
<CAPTION>
For the Three Months
Ended March 31,
--------------------
1995 1994
---- ----
<S> <C> <C>
Earnings:
Net income $25,720 $29,291
======== ========
Shares:
Weighted average number of common shares used
in computing primary earnings per share 39,457 39,054
Dilutive stock options - based on treasury stock
method 506 762
-------- --------
Weighted average number of common shares used
in computing fully diluted earnings per share 39,963 39,816
======== ========
Earnings per share:
Primary earnings per share $0.65 $0.75
Fully diluted earnings per share $0.64 $0.74
</TABLE>
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CENTRAL FIDELITY BANKS, INC.
- ----------------------------
(Registrant)
/s/ Charles W. Tysinger
Charles W. Tysinger
Corporate Executive Officer and Treasurer
(Principal Financial Officer)
/s/ James F. Campbell
James F. Campbell
Senior Vice President & Controller
(Principal Accounting Officer)
Date: May 12, 1995
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<CIK> 0000276235
<NAME> CENTRAL FIDELITY BANKS
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
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