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, 1997
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 report 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 6, 1997, the latest practicable date, Central Fidelity
Banks, Inc. had 56,596,035 shares of its Common Stock outstanding.
This is the only class of outstanding shares.
1
<PAGE>
<TABLE>
CENTRAL FIDELITY BANKS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31,1997
<CAPTION>
Page
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements 3-4
Consolidated Balance Sheet 5-6
Statement of Consolidated Income 7
Statement of Consolidated Cash Flows 8
Statement of Changes in Consolidated Shareholders'
Equity 9
Supplemental Data to Financial Statements:
Consolidated Financial Highlights 10
Average Balances and Interest Rates (Taxable
Equivalent Basis) 11-12
Selected Loan Loss Data 13
Nonperforming Assets and Past-due Loans 14
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations 15-22
PART II. OTHER INFORMATION
Item 6.Exhibits and Reports on Form 8-K 23
SIGNATURES 24
EXHIBIT INDEX 25
</TABLE>
2
<PAGE>
PART I
-----------
FINANCIAL INFORMATION
-----------------------------------------
CENTRAL FIDELITY BANKS, INC.
ITEM 1. FINANCIAL STATEMENTS
The consolidated balance sheet as of March 31, 1997, the statement of
consolidated income, the statement of consolidated cash flows and the
statement of changes in consolidated shareholders' equity for the
three-month periods ended March 31, 1997 and 1996 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, 1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997. 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, 1996 which is the source of the Company's balance sheet
as of that date.
ACCOUNTING CHANGE
- ------------------------------------
Change in Accounting Principles
- ----------------------------------------------
On January 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," (SFAS 125), which
requires companies to recognize the financial and servicing assets it
controls and the liabilities it has incurred after a transfer of financial
assets, and derecognize financial assets when control has been surrendered, and
derecognize liabilities when extinguished. In addition, a transfer of financial
assets in which the transferor surrenders control over those assets is
accounted for as a sale to the extent that consideration other than
beneficial interests in the transferred assets is received in exchange.
The adoption of SFAS 125 is not expected to have a material impact on
the financial condition or results of operations of the Company.
3
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per
Share," in February, 1997. SFAS 128 supersedes APB Opinion No. 15,
"Earnings Per Share," and specifies the computation, presentation, and
disclosure requirements for earnings per share (EPS) for entities with
publicly held common stock. SFAS 128 replaces primary EPS and fully
diluted EPS with basic EPS and diluted EPS, respectively. It also
requires dual presentation of basic EPS and diluted EPS on the face of
the income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic
EPS computation to the numerator and denominator of the diluted EPS
computation. The Company will implement the new disclosures at
December 31, 1997, as required. The adoption of SFAS 128 will not have
a material effect on the Company's EPS.
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 129 (SFAS 129), "Disclosure of
Information about Capital Structure," in February, 1997. SFAS 129 requires
all entities, public and nonpublic, that were subject to the requirements of
APB Opinions No. 10, "Omnibus Opinion," No. 15, "Earnings Per Share,"
and FASB Statement No. 47, "Disclosure of Long-Term Obligations" to
disclose certain information about its capital structure. The Company will
implement the new disclosures at December 31, 1997, as required. The
adoption of SFAS 129 is not expected to have a material impact on the
financial condition or results of operations of the Company.
4
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEET
Central Fidelity Banks, Inc. and Subsidiaries
- ------------------------------------------------------------------
(In thousands, except share data)
<CAPTION>
March 31, December 31,
1997 1996
<S> <C> <C>
- ------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------
Cash and due from banks $261,680 $304,661
Temporary investments:
Federal funds sold and securities purchased
under agreements to resell 260,150 96,515
Other money market investments -- 50,000
Trading account securities 1,804 4,061
- ------------------------------------------------------------------
Total temporary investments 261,954 150,576
- ------------------------------------------------------------------
Assets available for sale:
Securities 2,929,675 3,069,624
Loans 19,219 26,085
- ------------------------------------------------------------------
Total assets available for sale 2,948,894 3,095,709
- ------------------------------------------------------------------
Loans 6,788,875 6,690,751
Allowance for loan losses (110,000) (110,000)
- ------------------------------------------------------------------
Net loans 6,678,875 6,580,751
- ------------------------------------------------------------------
Accrued interest receivable 60,617 61,819
Premises and equipment, net 161,933 157,119
Due from customers on acceptances 6,576 11,009
Other assets 189,127 178,716
- ------------------------------------------------------------------
Total assets $10,569,656 $10,540,360
- ------------------------------------------ ========== ==========
</TABLE>
5
<TABLE>
<CAPTION> March 31, December 31,
LIABILITIES 1997 1996
<S> <C> <C>
- ------------------------------------------------------------------
Deposits:
Demand $1,194,357 $1,189,808
Savings and other time 6,360,495 6,393,420
Certificates of deposit $100,000
and over 462,571 488,226
- ------------------------------------------------------------------
Total deposits 8,017,423 8,071,454
- ------------------------------------------------------------------
Borrowings:
Federal funds purchased and securities sold
under agreements to repurchase 1,016,152 907,875
Other short-term borrowings 63,699 72,274
Federal Home Loan Bank borrowings 396,661 400,080
Long-term debt 150,299 150,324
Capitalized lease obligations 7,325 7,334
- ------------------------------------------------------------------
Total borrowings 1,634,136 1,537,887
- ------------------------------------------------------------------
Dividends payable 12,897 13,059
Accrued interest payable 32,018 29,160
Bank acceptances outstanding 6,576 11,009
Accounts payable and accrued liabilities 44,422 31,292
- ------------------------------------------------------------------
Total liabilities 9,747,472 9,693,861
- ------------------------------------------------------------------
SHAREHOLDERS' EQUITY
- ------------------------------------------------------------------
Preferred stock, none issued -- --
Common stock, par value $5 per share, authorized
100,000,000 shares, shares issued: 58,599,425
and 59,378,319, respectively 292,997 296,892
Capital surplus 152,158 171,926
Unamortized deferred compensation (750) --
Retained earnings 385,953 368,457
Unrealized gains (losses) on securities available
for sale, net of income taxes (8,174) 9,224
- ------------------------------------------------------------------
Total shareholders' equity 822,184 846,499
- ------------------------------------------------------------------
Total liabilities and shareholders'
equity $10,569,656 $10,540,360
- ------------------------------------------ ========== ==========
- ------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
STATEMENT OF CONSOLIDATED INCOME
Central Fidelity Banks, Inc. and Subsidiaries
- ---------------------------------------------------------------
(In thousands, except share and per share data)
For the three months ended March 31,
<CAPTION>
1997 1996
<S> <C> <C>
- ---------------------------------------------------------------
Income From Earning Assets
- ---------------------------------------------------------------
Interest and fees on loans $148,058 $139,161
Interest on securities available for sale:
U.S. Government and agencies 30,600 36,211
States and political subdivisions 1,334 1,501
Other 15,970 18,802
Interest on loans available for sale 308 242
Interest on money market investment 991 1,568
Interest on trading account securities 67 13
- ----------------------------------------------------------------
Total income from earning assets 197,328 197,498
- ----------------------------------------------------------------
Interest Expense
- ---------------------------------------------------------------
Interest on deposits 77,510 81,336
Interest on federal funds purchased and securities
sold under agreements to repurchase 11,224 12,701
Interest on other short-term borrowings 759 977
Interest on medium-term notes -- 2,500
Interest on Federal Home Loan Bank
borrowings 5,976 6,137
Interest on long-term debt 2,510 2,502
Interest on capitalized lease obligations 147 170
- ----------------------------------------------------------------
Total interest expense 98,126 106,323
- ----------------------------------------------------------------
Net interest income 99,202 91,175
Provision for loan losses 14,233 10,307
- ----------------------------------------------------------------
Net income from earning assets 84,969 80,868
- ----------------------------------------------------------------
Noninterest Income
- ---------------------------------------------------------------
Trust income 4,495 4,295
Deposit fees and charges 9,937 9,363
Profits on securities available for sale and
trading account securities, net 1,465 156
Other income 8,633 6,825
- ----------------------------------------------------------------
Total noninterest income 24,530 20,639
- ----------------------------------------------------------------
Noninterest Expense
- ---------------------------------------------------------------
Personnel expense 37,540 34,316
Occupancy and equipment expense 11,988 11,546
FDIC insurance expense 394 654
Other real estate expense 181 887
Other expense 14,384 13,065
- ----------------------------------------------------------------
Total noninterest expense 64,487 60,468
- ----------------------------------------------------------------
Earnings
- ---------------------------------------------------------------
Income before income taxes 45,012 41,039
Income tax expense 14,619 13,058
- ----------------------------------------------------------------
Net income $30,393 $27,981
- --------------------------------------- ======== ========
Earnings Per Share
- ---------------------------------------------------------------
Net income $0.52 $0.47
Average shares outstanding 58,864,168 60,292,019
- ---------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
STATEMENT OF CONSOLIDATED CASH FLOWS
Central Fidelity Banks, Inc. and Subsidiaries
- ----------------------------------------------------------------------
(In thousands) For the three months ended March 31,
<CAPTION>
1997 1996
<S> <C> <C>
- ----------------------------------------------------------------------
OPERATING ACTIVITIES
- ----------------------------------------------------------------------
Net income $30,393 $27,981
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 14,233 10,307
Depreciation of premises and equipment 4,275 3,950
Net amortization of premium and accretion of discount
on securities available for sale (209) (210)
Gains on securities available for sale (1,223) (320)
Deferred income taxes (535) (764)
(Increase) decrease in trading account
securities 2,257 (2,064)
Originations of loans available for sale (33,429) (34,543)
Purchases of loans available for sale (21,915) (31,383)
Proceeds from sales of loans available for
sale 62,291 55,387
Decrease in accrued interest receivable 1,202 946
Increase (decrease) in accrued interest
payable 2,858 (2,403)
Other, net 12,611 12,892
- ----------------------------------------------------------------------
Net cash provided by operating activities 72,809 39,776
- ----------------------------------------------------------------------
INVESTING ACTIVITIES
- ----------------------------------------------------------------------
Purchases of securities available for sale (151,670) (148,040)
Proceeds from sales of securities available
for sale 80,327 146,616
Proceeds from maturities and repayments of securities
available for sale 185,958 167,819
Net increase in loans (116,454) (62,677)
Purchases of premises and equipment (9,105) (5,879)
Proceeds from the disposition of premises
and equipment 5 1,215
Proceeds from the disposition of foreclosed
properties 4,182 1,376
- ----------------------------------------------------------------------
Net cash provided (used) by investing
activities (6,757) 100,430
- ----------------------------------------------------------------------
FINANCING ACTIVITIES
- ----------------------------------------------------------------------
Net decrease in demand, interest checking and
regular savings deposits (649,664) (15,316)
Net decrease in consumer certificates (71,422) (22,800)
Net increase (decrease) in money market accounts 692,710 (6,076)
Net decrease in certificates of deposit $100,000
and over (25,655) (143,064)
Net increase in short-term borrowings 99,702 11,664
Payments on medium-term notes -- (150,000)
Proceeds from FHLB borrowings 23,381 57,200
Payments from FHLB borrowings (26,800) --
Payments on long-term debt and capitalized
lease obligations (110) (124)
Proceeds from issuance of common stock 3,263 5,294
Common stock purchased (27,744) (15,226)
Cash dividends (13,059) (12,052)
- ----------------------------------------------------------------------
Net cash provided (used) by financing
activities 4,602 (290,500)
- ----------------------------------------------------------------------
Increase (decrease) in cash and cash
equivalents 70,654 (150,294)
Cash and cash equivalents at beginning
of year 451,176 571,314
- ----------------------------------------------------------------------
Cash and cash equivalents at end of
period 521,830 421,020
- ------------------------------------------------ ======== ========
- ----------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY
Central Fidelity Banks, Inc. and Subsidiaries
- --------------------------------------------------------------------------------------------------------------
- -------
<CAPTION>
Unrealized
Gains
(Losses)
Unamortized on
Securities Total
(In thousands) Common Stock Capital Deferred Retained
Available Shareholders
For the three months ended
March 31, 1996 Shares Amount Surplus Compensation Earnings for
Sale Equity
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
- -------
Balance at beginning of period 40,193 $200,964 $195,151 $-- $406,567
$23,865 $826,547
Net income -- -- -- -- 27,981
- -- 27,981
Common stock issued under Plans 206 1,034 4,260 -- --
-- 5,294
Common stock purchased (449) (2,247) (12,979) -- --
- -- (15,226)
Cash dividends declared on common
stock -- -- -- -- (12,030)
- -- (12,030)
Change in unrealized gains on securities
available for sale, net of income
taxes of $13,056 -- -- -- -- --
(24,247) (24,247)
- --------------------------------------------------------------------------------------------------------------
- -------
Balance at end of period 39,950 $199,751 $186,432 $-- $422,518
($382) $808,319
- -----------------------------------======= ========= ========= =========
========= =========
=========
For the three months ended March 31, 1997
- --------------------------------------------------------------------------------------------------------------
- -------
Balance at beginning of period 59,378 $296,892 $171,926 $-- $368,457
$9,224 $846,499
Net income -- -- -- -- 30,393
- -- 30,393
Common stock issued under Plans 178 893 2,370 -- --
- -- 3,263
Grant of shares of restricted stock
awards 32 158 660 (818) --
- -- --
Amortization of deferred
compensation -- -- -- 68 --
- -- 68
Common stock purchased (989) (4,946) (22,798) -- --
- -- (27,744)
Cash dividends declared on common
stock -- -- -- -- (12,897)
- -- (12,897)
Change in unrealized gains on securities
available for sale, net of income
taxes of $9,368 -- -- -- -- --
(17,398) (17,398)
- --------------------------------------------------------------------------------------------------------------
- -------
Balance at end of period 58,599 $292,997 $152,158 ($750) $385,953
($8,174) $822,184
- -----------------------------------======= ========= ========= =========
========= =========
=========
- --------------------------------------------------------------------------------------------------------------
- -------
</TABLE>
9
<PAGE>
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
Central Fidelity Banks, Inc. and Subsidiaries
- --------------------------------------------------------------------------------------------------------------
- -----------
<CAPTION>
(In thousands, except share and per share data)
For the three months ended March 31, 1997 1996 Change
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
- -----------
Results Of Operations
- --------------------------------------------------------------------------------------------------------------
- -----------
Net interest income (tax-equivalent basis) $100,883 $92,936 8.6 %
Provision for loan losses 14,233 10,307 38.1
Noninterest income 24,530 20,639 18.9
Noninterest expense 64,487 60,468 6.6
Net income 30,393 27,981 8.6
Per Share Data
- --------------------------------------------------------------------------------------------------------------
- -----------
Net income $0.52 $0.47 10.6 %
Book value 14.04 13.49 4.1
Average Daily Balance
- --------------------------------------------------------------------------------------------------------------
- -----------
Assets $10,313,121 $10,468,948 (1.5)%
Loans 6,735,133 6,335,868 6.3
Earning assets 9,798,524 9,936,202 (1.4)
Deposits 7,917,348 7,819,641 1.2
Shareholders' equity 823,761 822,450 0.2
Common shares 58,864,168 60,292,019 (2.4)
Balance At Quarter-End
- --------------------------------------------------------------------------------------------------------------
- -----------
Assets $10,569,656 $10,534,452 0.3 %
Loans 6,808,094 6,376,365 6.8
Earning assets 9,999,723 9,973,720 0.3
Deposits 8,017,423 7,798,642 2.8
Shareholders' equity 822,184 808,319 1.7
Common shares 58,599,425 59,921,747 (2.2)
Key Performance Ratios (Basis point change)
- --------------------------------------------------------------------------------------------------------------
- -----------
Return on average assets 1.18 % 1.07 % 0.11
Return on average shareholders' equity 14.76 13.61 1.15
Net interest margin (tax-equivalent basis) 4.18 3.76 0.42
Efficiency 51.88 52.53 (0.65)
Allowance for loan losses as a percentage of loans 1.62 1.73 (0.11)
Equity to total assets 7.78 7.67 0.11
Risk-based capital 13.09 13.17 (0.08)
- --------------------------------------------------------------------------------------------------------------
- -----------
COMMON STOCK PERFORMANCE AND DIVIDENDS
- --------------------------------------------------------------------------------------------------------------
- -----------
Common Stock Prices
---------------------------------------------------- Dividends
1997 1996 Per Share
---------------------------------------------------- -------------------------
High Low High Low 1997 1996
----------- ----------- ------------ ------------ ------------ -----------
First Quarter $30.25 $25.13 $23.00 $21.09 $.22 $.20
Second Quarter 23.67 22.00 .22
Third Quarter 25.38 21.50 .22
Fourth Quarter 27.50 24.00 .22
- --------------------------------------------------------------------------------------------------------------
- -----------
</TABLE>
10
<PAGE>
<TABLE>
AVERAGE BALANCES AND INTEREST RATES (Taxable Equivalent Basis)
Central Fidelity Banks, Inc. and Subsidiaries
- --------------------------------------------------------------------------------------------------------------
- -
(In thousands) For the three months ended March 31, 1997 1996
- --------------------------------------------------------------------------------------------------------------
- -
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
- -
Assets
- --------------------------------------------------------------------------------------------------------------
- -
Interest-earning assets:
Loans:
Commercial and commercial
real estate $2,136,595 $43,368 8.23 % $1,994,064 $42,090 8.49
%
Construction 318,291 7,306 9.31 285,169 6,495 9.16
Residential real estate 1,617,680 30,346 7.61 1,607,454 29,363
7.35
Consumer second mortgage 778,077 18,348 9.56 622,031 15,122
9.78
Installment 1,032,942 22,128 8.69 1,044,530 22,260 8.57
Bank card 836,094 27,276 13.23 769,608 24,659 12.89
- ------------------------------------------------------------------- --------------------------
6,719,679 148,772 8.98 6,322,856 139,989 8.90
Assets available for sale:
Securities:
U.S. Government and agencies 1,902,033 30,600 6.52 2,233,721
36,211 6.52
States and political subdivisions 96,925 2,036 8.40 112,704 2,309
8.20
Other 989,402 16,228 6.65 1,134,828 18,842 6.68
- ------------------------------------------------------------------- --------------------------
2,988,360 48,864 6.63 3,481,253 57,362 6.63
Loans 15,454 308 8.09 13,012 242 7.49
- ------------------------------------------------------------------- --------------------------
3,003,814 49,172 6.64 3,494,265 57,604 6.63
Money market investments 72,554 991 5.54 118,134 1,649
5.61
Trading account securities 2,477 74 12.12 947 17 7.09
- ------------------------------------------------------------------- --------------------------
Total interest-earning assets 9,798,524 $199,009 8.24 % 9,936,202
$199,259 8.07 %
- ---------------------------------------------------- ======== ------------ ========
Noninterest-earning assets:
Cash and due from banks 248,295 267,549
Premises and equipment, net 158,957 152,978
Other assets 217,345 222,219
Allowance for loan losses (110,000) (110,000)
- ---------------------------------------------------- ------------
Total assets $10,313,121 $10,468,948
- ---------------------------------------- ========== ==========
</TABLE>
11
<TABLE>
<CAPTION>
Liabilities and Shareholders' Equity 1997 1996
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
- -
Interest-bearing liabilities:
Interest checking $721,166 $3,602 2.03 % $684,446 $3,433
2.02 %
Regular savings 727,711 4,752 2.65 733,436 4,982 2.73
Consumer certificates 3,909,039 53,432 5.54 4,121,389 58,936
5.75
Money market accounts 1,023,147 9,908 3.93 1,056,627 10,499
4.00
Certificates of deposit $100,000
and over 442,260 5,816 5.33 253,209 3,486
5.54
Federal funds purchased and repos 897,063 11,224 5.07 987,229 12,701
5.17
Other short-term borrowings 61,165 759 5.03 79,795 977
4.93
Medium-term notes -- -- -- 176,426 2,500 5.70
Federal Home Loan Bank borrowings 397,915 5,976 6.09 386,458
6,137 6.39
Long-term debt 150,312 2,510 6.77 150,376 2,502 6.69
Capitalized lease obligations 7,266 147 8.20 7,686 170 8.90
- ------------------------------------------------------------------- --------------------------
Total interest-bearing
liabilities 8,337,044 $98,126 4.77 % 8,637,077
$106,323 4.95 %
- ---------------------------------------------------- ======== ------------ ========
Noninterest-bearing liabilities:
Demand deposits 1,094,025 970,534
Other 58,291 38,887
- ---------------------------------------------------- -----------------
Total noninterest-bearing
liabilities 1,152,316 1,009,421
Shareholders' equity 823,761 822,450
- ---------------------------------------------------- -----------------
Total liabilities and
shareholders' equity $10,313,121 $10,468,948
- ---------------------------------------- ========== ==========
Net interest earnings $100,883 $92,936
- ---------------------------------------- ======== ========
Net interest spread 3.47 % 3.12 %
- ---------------------------------------- ====== ======
Net interest margin 4.18 % 3.76 %
- ---------------------------------------- ====== ======
- --------------------------------------------------------------------------------------------------------------
- -
</TABLE>
12
<PAGE>
<TABLE>
SELECTED LOAN LOSS DATA
Central Fidelity Banks, Inc. and Subsidiaries
- ---------------------------------------------------------------------
<CAPTION
(In thousands) For the three months ended
March 31, 1997 1996
<S> <C> <C>
- ---------------------------------------------------------------------
Balance at beginning of period $110,000 $110,000
Provision charged to expense 14,233 10,307
- ---------------------------------------------------------------------
124,233 120,307
Loans charged off:
Commercial and commercial real estate 2,919 1,539
Construction 92 500
Residential real estate 93 138
Installment 4,930 4,646
Bank card 10,461 7,580
- ---------------------------------------------------------------------
Total charge-offs 18,495 14,403
- ---------------------------------------------------------------------
Recoveries of loans previously charged off:
Commercial and commercial real estate 853 670
Construction 131 702
Residential real estate 2 2
Installment 2,229 1,900
Bank card 1,047 822
- ---------------------------------------------------------------------
Total recoveries 4,262 4,096
- ---------------------------------------------------------------------
Net charge-offs 14,233 10,307
- ---------------------------------------------------------------------
Balance at end of period $110,000 $110,000
- --------------------------------------------- ========= =========
Average loans $6,735,133 $6,335,868
Loans at period-end $6,808,094 $6,376,365
Ratio of provision for loan losses to
average loans 0.85% 0.65%
Ratio of net charge-offs to average loans 0.85% 0.65%
Ratio of allowance for loan losses to loans
at period-end 1.62% 1.73%
- ---------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
NONPERFORMING ASSETS AND PAST-DUE LOANS
Central Fidelity Banks, Inc. and Subsidiaries
- ---------------------------------------------------------------------------------
(In thousands)
<CAPTIO March 31, December 31,
1997 1996 1996
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------
Nonperforming Assets
- ---------------------------------------------------------------------------------
Nonaccrual loans:
Land acquisition, land development
or construction:
Commercial $3,727 $6,131 $3,912
Residential 9,904 11,603 12,060
Residential real estate 7,204 4,957 6,100
Commercial real estate 8,467 9,988 8,480
Commercial and industrial 8,208 8,772 8,020
- ---------------------------------------------------------------------------------
Total nonaccrual loans 37,510 41,451 38,572
- ---------------------------------------------------------------------------------
Restructured loans -- -- --
- ---------------------------------------------------------------------------------
Total nonperforming loans 37,510 41,451 38,572
- ---------------------------------------------------------------------------------
Foreclosed properties:
Land and developed lots:
Commercial 2,009 2,640 2,010
Residential 9,748 9,742 7,917
Residential real estate 3,252 3,982 4,448
Commercial real estate 836 1,880 1,081
- ---------------------------------------------------------------------------------
Total foreclosed properties 15,845 18,244 15,456
- ---------------------------------------------------------------------------------
Total nonperforming assets $53,355 $59,695 $54,028
- --------------------------------------------- ======= ======= =======
Ratio of nonperforming assets to
loans and foreclosed properties 0.78% 0.93% 0.80%
- ---------------------------------------------------------------------------------
Past-due Loans (90 days or more and still accruing)
- ---------------------------------------------------------------------------------
Commercial and construction $759 $1,147 $2,451
Residential real estate 8,406 6,623 7,508
Installment 4,981 3,832 5,795
Bank card 10,292 8,262 10,192
- ---------------------------------------------------------------------------------
Total past-due loans $24,438 $19,864 $25,946
- --------------------------------------------- ======= ======= =======
- ---------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
CENTRAL FIDELITY BANKS, INC.
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This discussion is intended to provide information about the
Company's financial condition and results of operations which may not
be readily 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 ended March 31, 1997 was
$30.4 million, 8.6% higher than the $28.0 million earned in the first three
months of 1996. On a per share basis, net income increased 10.6% to
$.52 from $.47.
On a tax-equivalent basis, net interest income for the three months
ended March 31, 1997 was $100.9 million, an 8.6% increase from the net
interest income earned in the corresponding 1996 period. The net
interest margin was 4.18% for the three months ended March 31, 1997, up
42 basis points from 3.76% during the same period in 1996. The growth in
net interest income and net interest margin during the first three months of
1997 were impacted by the higher yield on earning assets and a reduced
cost of interest-bearing liabilities. For the first three months of 1997,
average earning assets and interest earned on earning assets declined
$137.7 million and $250,000, respectively, from the level recorded in the
first three months of 1996. The declines in average earning assets and
interest earned on earning assets were due primarily to the lower
levels in securities available for sale and money market investments
during the first three months of 1997. The yield on average earning
assets increased 17 basis points. The average interest-bearing
liabilities declined $300,000, or 3.5% from the three months ended March
31, 1996. Interest expense on interest-bearing liabilities declined $8.2
million to $98.1 million, or 7.7%, from the corresponding 1996 period, and
the cost of interest-bearing liabilities declined 18 basis points.
15
For the three-month period ended March 31, 1997, the Company's
interest rate swap activities resulted in declines in interest income of
$283,000 and interest expense of $469,000 compared to a $197,000
decrease in interest income and a $126,000 increase in interest
expense for the corresponding period in 1996. The Company's interest
rate swap activities resulted in increase of net interest income of
$186,000 for the three months ended March 31, 1997 and reduction of net
interest income of $323,000 for the same period in 1996.
The provision for loan losses was $14.2 million for the three months
ended March 31, 1997 compared with $10.3 million recorded for the
corresponding period in 1996. The increase in the provision was
prompted by a higher level of net charge-offs. The higher levels of net
charge-offs for the first three months of 1997 resulted principally from
continued losses in consumer portfolios and a $2.3 million nonrecurring
loss in the commercial loan portfolio.
Noninterest income totalled $24.5 million for the three months ended
March 31, 1997 compared with $20.6 million for the same period in 1996,
representing an increase of 18.9% The increase resulted from higher
trust income and profits on securities available for sale and trading
account securities, and growth in deposit fees and charges and other
miscellaneous fee categories.
Noninterest expense grew 6.6% to $64.5 million for the first three
months of 1997 compared with the same period in 1996. The growth in
noninterest expense was due primarily from higher personnel,
occupancy and equipment costs.
Balance Sheet
- --------------------
Total assets as of March 31, 1997 were $10.6 billion, a modest
increase from $10.5 billion at the end of 1996. Total loans at March 31,
1997 were $6.8 billion, or 1.4% higher than at December 31, 1996,
representing growth primarily in both the commercial and consumer
mortgages of the portfolio. Total deposits were $8.0 billion at March 31,
1997, flat from year-end 1996's level. Shareholders' equity at March
31, 1997 was $822.2 million, or 7.8% of total assets. At December
31, 1996, shareholders' equity was $846.5 million, or 8.0% of total assets.
Book value per share declined from $14.26 at December 31, 1996 to
$14.04 at March 31, 1997, due principally to the acquisition and retirement
of shares under the Company's Stock Repurchase Program.
The return on average total assets during the first three months of
1997 was 1.18% compared to 1.07% for the comparable 1996 period.
The return on average shareholders' equity was 14.76% versus 13.61%
in 1996.
16
Asset Quality
- -----------------
Nonperforming assets as of March 31, 1997 were $53.4 million, or
.50% of total assets, compared to $54.0 million or .51% of total assets at
December 31, 1996 and $59.7 million or .57% of total assets at March 31,
1996. At March 31, 1997, nonperforming assets were .78% of loans and
foreclosed properties, compared to .80% at December 31, 1996 and
.93% at March 31, 1996. The lower level of nonperforming assets was
primarily a result of overall improved quality in the loan portfolio.
The allowance for loan losses was $110.0 million at March 31, 1997,
December 31, 1996 and March 31, 1996. At March 31, 1997, the
allowance for loan losses was 1.62% of loans, compared to 1.64% at
December 31, 1996 and 1.73% at March 31, 1996. At March 31, 1997, the
allowance for loan losses to nonperforming assets was 2.06x,
compared to 2.04x at December 31, 1996 and 1.84x at March 31, 1996.
Net loan charge-offs for the three months ended March 31, 1997 were
$14.2 million, representing .85% of average loans on an annualized
basis. Net loan charge-offs were $11.9 million or .71% of average loans
for the three months ended December 31, 1996 and $10.3 million or .65%
of average loans for the three months ended March 31, 1996.
The allowance for loan losses represents management's estimate of
an amount adequate to absorb potential 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.
17
Capital Resources
- -------------------------
At March 31, 1997, the Company's risk-based capital and leverage
ratios exceeded the Federal Reserve's minimum guidelines. At March
31, 1997, the Company's Tier 1 and total risk-based capital were $772.5
million and $1.0 billion, as compared to $778.2 million and $1.0 billion at
December 31, 1996, and $746.1 million and $990.2 million at March 31,
1996, respectively. The ratios of Tier 1 and total risk-based capital to
risk-weighted assets were 9.91% and 13.09% at March 31, 1997,
compared to 10.09% and 13.29% at year-end 1996, and 9.92% and
13.17% at March 31, 1996, respectively. At March 31, 1997, the Company's
leverage ratio was 7.53%, compared to 7.57% at December 31, 1996 and
7.17% at March 31, 1996. At March 31, 1997, the Bank's total risk-based
capital and leverage ratios were 12.85% and 7.36%, respectively.
Based upon the risk-based capital and leverage requirements,
Central Fidelity's capital structure places it well above the Federal
Reserve Board's minimum guidelines and in the well capitalized
category when measured against FDIC criteria. The Company will
continue to review and monitor the asset mix and pricing, and other areas
determined to be most affected by these capital requirements.
During the three months ended March 31, 1997, the Company
purchased and retired 989,000 shares of its common stock for a total of
$27,744,000 under the Stock Repurchase Program and has 3.4 million
shares authorized for future buybacks. Repurchases under the
program may be discontinued or interrupted at any time.
On May 1, 1997, the Company entered into an accelerated stock
repurchase program under which 2,000,000 shares of its outstanding
common stock were acquired and cancelled for an initial amount of
$55,810,000; final settlement on this transaction is expected to occur in the
third quarter 1997. The amount of the settlement is not presently known,
however, its effect upon the capital accounts of the Company is expected
to be immaterial. The source of funds for this transaction was the sale on
April 23, 1997 of $100,000,000 of Trust Preferred Securities sold by a
newly created special purpose subsidiary.
18
Off-Balance-Sheet Derivatives
- ------------------------------------------
In the context of its asset/liability management, the Company is a
limited end-user of off-balance-sheet financial derivatives as a
cost-efficient vehicle for managing interest rate sensitivity. Interest rate
swaps have been the main derivative instrument used to modify the
repricing characteristics of various balance sheet assets and liabilities.
The interest rate swaps entered into by the Company are essentially
commitments to participate in cash settlements with a counterparty at
various future dates as agreed to in the swap contract. These cash
settlements result from movements in interest rates and are based on
differences in specific rate indexes as applied to the notional principal
amount of the contract.
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. Any
change in market value fluctuation generally correspond to market
fluctuation in the underlying asset or liability being hedged. In the event
that a derivative product is 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 limited 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.
19
<PAGE>
<TABLE>
SUMMARY OF INTEREST RATE SWAPS
Central Fidelity Banks, Inc. and Subsidiaries
- --------------------------------------------------------------------------------------------------------
The weighted average variable rates are based upon the contractual rates in effect at
March 31, 1997:
(In Thousands) March 31, 1997
<CAPTION>
Average Year-To-Date
Notional Weighted Average Rate Maturity Interest
Unrecognized
Amount Receive Pay In Year Income/(Expense) Gains
(Losses)
<S> <C> <C> <C> <C> <C>
<C>
- --------------------------------------------------------------------------------------------------------
Company Hedging Swaps
- --------------------------------------------------------------------------------------------------------
Pay fixed/receive variable:
Variable rate medium-term
borrowings $50,000 5.59 % (1) 6.42 % 0.18 ($108) ($86)
Securities available for sale -- -- -- -- (162) --
Fixed rate commercial loans -- -- -- -- (67) --
- ------------------------------------------------ -------------- -------------
Total pay fixed/receive
variable 50,000 5.59 6.42 0.18 (337) (86)
- ------------------------------------------------ -------------- -------------
Receive fixed/pay variable:
Fixed rate subordinated debt 150,000 7.10 5.54 (1) 5.63 577 1,119
Variable rate commercial loans -- -- -- -- (54) --
- ------------------------------------------------ -------------- -------------
Total receive fixed/pay
variable 150,000 7.10 5.54 5.63 523 1,119
- ------------------------------------------------ -------------- -------------
Total company hedging swaps $200,000 6.72 % 5.76 % 4.27 $186
$1,033
- ----------------------------------======== ======== ========
- --------------------------------------------------------------------------------------------------------
Customer Hedging Swaps
- --------------------------------------------------------------------------------------------------------
Pay fixed/receive variable $4,500 5.45 % (1) 9.11 % 1.06 $165
($269)
Receive fixed/pay variable 4,500 9.20 5.45 (1) 1.06 (164) 274
- ------------------------------------------------ -------------- -------------
Total customer hedging swaps $9,000 7.33 % 7.28 % 1.06 $1 $5
- ----------------------------------======== ======== ========
The weighted average variable rates are based upon the contractual rates in effect at
March 31, 1996:
(In Thousands) March 31, 1996
- --------------------------------------------------------------------------------------------------------
Company Hedging Swaps
- --------------------------------------------------------------------------------------------------------
Pay fixed/receive variable:
Variable rate medium-term
borrowings $100,000 5.34 % (1) 5.47 % 1.53 ($26)
($336)
Securities available for sale 15,943 5.70 (2) 9.00 3.49 (422) (588)
Fixed rate commercial loans 22,904 5.42 (1) 6.83 3.45 (79) (523)
- ------------------------------------------------ -------------- -------------
Total pay fixed/receive
variable 138,847 5.39 6.11 2.08 (527) (1,447)
- ------------------------------------------------ -------------- -------------
Receive fixed/pay variable:
Fixed rate subordinated debt 150,000 7.10 5.25 (1) 6.63 588 4,996
Fixed rate medium-term
borrowings 100,000 4.69 5.25 (1) 0.21 (266) (226)
Variable rate commercial loans 100,000 4.77 5.47 (1) 0.81 (118)
(886)
- ------------------------------------------------ -------------- -------------
Total receive fixed/pay
variable 350,000 5.74 5.31 3.13 204 3,884
- ------------------------------------------------ -------------- -------------
Total company hedging swaps $488,847 5.64 % 5.54 % 2.83 ($323)
$2,437
- ----------------------------------======== ======== ========
- --------------------------------------------------------------------------------------------------------
Customer Hedging Swaps
- --------------------------------------------------------------------------------------------------------
Pay fixed/receive variable $4,500 5.36 % (1) 9.11 % 2.06 $163
($413)
Receive fixed/pay variable 4,500 9.20 5.36 (1) 2.06 (162) 421
- ------------------------------------------------ -------------- -------------
Total customer hedging swaps $9,000 7.74 % 7.71 % 2.06 $1 $8
- ----------------------------------======== ======== ========
- --------------------------------------------------------------------------------------------------------
(1) Variable rate is tied to London Inter-Bank Offered Rate (LIBOR) with designated 3-
month maturity.
(2) Variable rate is tied to London Inter-Bank Offered Rate (LIBOR) with designated 1-
month maturity plus 60 basis
points.
</TABLE>
20
<PAGE>
<TABLE>
INTEREST RATE SWAPS - NOTIONAL AMOUNT ROLLFORWARD
Central Fidelity Banks, Inc. and Subsidiaries
- -------------------------------------------------------------------
Pay fixed/ Pay variable Total
(In thousands) receive receive All
<CAPTION> variable fixed Swaps
<S> <C> <C> <C>
- -------------------------------------------------------------------
Notional Amount
- -------------------------------------------------------------------
Company Swaps:
Beginning balance, January 1,
1997 $72,150 $250,000 $322,150
New swaps -- -- --
Terminated swaps (21,886) -- (21,886)
Matured swaps -- (100,000) (100,000)
Amortization of swaps (264) -- (264)
- -------------------------------------------------------------------
Ending balance, March 31,
1997 $50,000 $150,000 $200,000
- ------------------------------- ======== ======== ========
Customer Swaps:
Beginning balance, January 1,
1997 $4,500 $4,500 $9,000
New swaps -- -- --
Terminated swaps -- -- --
Matured swaps -- -- --
Amortization of swaps -- -- --
- -------------------------------------------------------------------
Ending balance, March 31,
1997 $4,500 $4,500 $9,000
- ------------------------------- ======== ======== ========
- -------------------------------------------------------------------
</TABLE>
21
<PAGE>
<TABLE>
EXPECTED MATURITIES OF INTEREST RATE SWAPS
Central Fidelity Banks, Inc. and Subsidiaries
- ----------------------------------------------------------------------------------------------------
<CAPTION>
Due After One After Two After Three After Four
Within Through Through Through Through
After
(In Thousands) March 31, 1997 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 $50,000 -- -- -- -- -- $50,000
Weighted average pay rate 6.42% -- -- -- -- -- 6.42%
Weighted average receive rate:
Contractual rate* 5.59% -- -- -- -- -- 5.59%
Forward yield curve** 5.78% -- -- -- -- -- 5.78%
Receive fixed/pay variable:
Notional amount -- -- -- -- -- $150,000 $150,000
Weighted average pay rate:
Contractual rate* -- -- -- -- -- 5.54% 5.54%
Forward yield curve** -- -- -- -- -- 7.07% 7.07%
Weighted average receive rate -- -- -- -- -- 7.10% 7.10%
- ----------------------------------------------------------------------------------------------------
Customer Hedging Swaps
- ----------------------------------------------------------------------------------------------------
Pay fixed/receive variable:
Notional amount -- $4,500 -- -- -- -- $4,500
Weighted average pay rate -- 9.11% -- -- -- -- 9.11%
Weighted average receive rate:
Contractual rate* -- 5.45% -- -- -- -- 5.45%
Forward yield curve** -- 6.33% -- -- -- -- 6.33%
Receive fixed/pay variable:
Notional amount -- $4,500 -- -- -- -- $4,500
Weighted average pay rate:
Contractual rate* -- 5.45% -- -- -- -- 5.45%
Forward yield curve** -- 6.33% -- -- -- -- 6.33%
Weighted average receive rate -- 9.20% -- -- -- -- 9.20%
- ----------------------------------------------------------------------------------------------------
* The weighted average variable rates are based upon the contractual rates in effect at
March 31, 1997.
** The weighted average variable rates are projected based upon the implied forward yield
curve from date of analysis through maturity.
</TABLE>
22
<PAGE>
PART II
-----------
OTHER INFORMATION
----------------------------------
CENTRAL FIDELITY BANKS, INC.
ITEM 6. Exhibits and Reports on Form 8-K.
A. Exhibits:
Exhibit 11 - Statement re computation of per share earnings
27 - Financial data schedule
B. Reports on Form 8-K:
A report on Form 8-K was filed on March 7, 1997 announcing
the authorization by the Company's Board of Directors to purchase up to an
additional 3,000,000 shares of its common stock under a repurchase
program that commenced in January, 1996. The 3,000,000 authorized
shares together with the remaining 400,000 shares under the 1996
authorization represent approximately 5.8% of the Company's shares
outstanding at March 6, 1997. The purchases under the program, when
and if commenced, may be discontinued or interrupted at any time.
23
<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 Vice President and Treasurer
(Principal Financial Officer)
/s/ James F. Campbell
James F. Campbell
Senior Vice President & Controller
(Principal Accounting Officer)
Date: May 13, 1997
24
<PAGE>
EXHIBIT INDEX
------------------------
Exhibit No. Description
- ----------- ------------------
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
25
<PAGE>
<TABLE>
EXHIBIT 11
CENTRAL FIDELITY BANKS, INC. AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(In Thousands)
<CAPTION>
For the Three
Ended March 31,
--------------------
1997 1996
------ ------
<S> <C> <C>
Earnings:
Net income $30,393 $27,981
======= =======
Shares:
Weighted average number of common shares used
in computing primary earnings per share 58,864 60,292
Dilutive stock options - based on treasury stock
method 1,241 994
--------------------
Weighted average number of common shares used
in computing fully diluted earnings
per share 60,105 61,286
======= =======
Earnings per share:
Primary earnings per share $0.52 $0.47
Fully diluted earnings per share $0.51 $0.46
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000276235
<NAME> CENTRAL FIDELITY BANKS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 261,680
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 260,150
<TRADING-ASSETS> 1,804
<INVESTMENTS-HELD-FOR-SALE> 2,929,675
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 6,808,094
<ALLOWANCE> 110,000
<TOTAL-ASSETS> 10,569,656
<DEPOSITS> 8,017,423
<SHORT-TERM> 1,079,851
<LIABILITIES-OTHER> 95,913
<LONG-TERM> 554,285
0
0
<COMMON> 292,997
<OTHER-SE> 529,187
<TOTAL-LIABILITIES-AND-EQUITY> 10,569,656
<INTEREST-LOAN> 148,366
<INTEREST-INVEST> 47,904
<INTEREST-OTHER> 1,058
<INTEREST-TOTAL> 197,328
<INTEREST-DEPOSIT> 77,510
<INTEREST-EXPENSE> 98,126
<INTEREST-INCOME-NET> 99,202
<LOAN-LOSSES> 14,233
<SECURITIES-GAINS> 1,465
<EXPENSE-OTHER> 64,487
<INCOME-PRETAX> 45,012
<INCOME-PRE-EXTRAORDINARY> 45,012
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,393
<EPS-PRIMARY> .52
<EPS-DILUTED> .51
<YIELD-ACTUAL> 4.02
<LOANS-NON> 37,510
<LOANS-PAST> 24,438
<LOANS-TROUBLED> 152
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 110,000
<CHARGE-OFFS> 18,495
<RECOVERIES> 4,262
<ALLOWANCE-CLOSE> 110,000
<ALLOWANCE-DOMESTIC> 110,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
