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 period ended September 30, 1996
Commission File Number: 0-12358
CCB FINANCIAL CORPORATION
(Exact name of issuer as specified in charter)
North Carolina 56-1347849
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
111 Corcoran Street, Post Office Box 931, Durham, NC 27702
(Address of principal executive offices)
Registrant's telephone number, including area code (919) 683-7777
Indicate by check mark whether the registrant (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 (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $5 Par value 15,062,499
(Class of Stock) (Shares outstanding
as of November 1, 1996)
<PAGE>
CCB FINANCIAL CORPORATION
FORM 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 1996, December 31, 1995 and
September 30, 1995 3
Consolidated Statements of Income
Three and Nine Months Ended September 30,
1996 and 1995 4
Consolidated Statements of Shareholders' Equity
Nine Months Ended September 30, 1996 and 1995 5
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1996 and 1995 6
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 1996 and 1995 7
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 19
Signatures 20
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CCB Financial Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Unaudited) (Unaudited)
September 30, December 31, September 30,
1996 1995 1995
Assets:
Cash and due from banks $ 190,216,784 189,320,033 181,498,544
Time deposits in other banks 60,136,542 72,131,355 31,429,559
Federal funds sold and other
short-term investments 170,800,000 308,081,862 328,000,000
Investment securities:
Available for sale 904,857,259 961,640,464 879,660,874
Held to maturity (market values
of $77,291,897,
$83,060,136 and $85,172,579) 74,197,481 78,091,957 81,423,638
Loans and lease financing (notes
2 and 4) 3,622,345,457 3,345,345,231 3,267,536,043
Less reserve for loan and
lease losses (note 3) 47,254,515 43,577,725 42,979,130
Net loans and lease financing 3,575,090,942 3,301,767,506 3,224,556,913
Premises and equipment 66,273,255 66,977,333 64,894,996
Other assets (notes 4 and 5) 116,272,130 111,775,657 110,657,361
Total assets $5,157,844,393 5,089,786,167 4,902,121,885
Liabilities:
Deposits:
Demand (noninterest-bearing) $ 554,294,050 538,177,666 516,258,581
Savings and NOW accounts 530,470,077 522,556,768 499,916,575
Money market accounts 1,378,819,313 1,309,544,849 1,281,673,955
Jumbo time deposits 286,328,491 294,828,281 291,050,949
Consumer time deposits 1,647,902,747 1,632,303,560 1,642,458,662
Total deposits 4,397,814,678 4,297,411,124 4,231,358,722
Short-term borrowed funds 143,058,210 177,958,782 79,425,824
Long-term debt 59,046,419 78,992,856 80,855,574
Other liabilities 96,220,962 101,906,402 95,872,216
Total liabilities 4,696,140,269 4,656,269,164 4,487,512,336
Shareholders' equity:
Serial preferred stock. Authorized
5,000,000 shares; none issued -- -- --
Common stock of $5 par value.
Authorized 50,000,000 shares;
15,061,334, 14,960,716 and
14,951,952 shares issued 75,306,670 74,803,580 74,759,760
Additional paid-in capital 90,253,142 89,437,260 89,184,976
Retained earnings 294,632,249 261,245,259 249,866,389
Unrealized gain on investment
securities available for sale,
net of applicable taxes 2,503,983 9,765,025 2,854,413
Less: Unearned common stock held by
management recognition plans (991,920) (1,734,121) (2,055,989)
Total shareholders' equity 461,704,124 433,517,003 414,609,549
Total liabilities and
shareholders' equity $5,157,844,393 5,089,786,167 4,902,121,885
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended September 30,
1996 1995
Interest income:
Interest and fees on loans and leases $ 81,311,579 76,729,015
Interest and dividends on investment
securities:
U.S. Treasury 7,392,963 7,593,843
U.S. Government agencies
and corporations 6,263,235 5,517,779
States and political subdivisions
(primarily tax-exempt) 1,091,811 1,219,135
Equity and other securities 506,890 531,755
Interest on time deposits in other banks 651,846 831,198
Interest on federal funds sold and
other short-term investments 2,756,829 4,122,100
Total interest income 99,975,153 96,544,825
Interest expense:
Deposits 42,993,333 43,466,931
Short-term borrowed funds 1,743,806 931,491
Long-term debt 983,640 1,485,141
Total interest expense 45,720,779 45,883,563
Net interest income 54,254,374 50,661,262
Provision for loan and lease
losses (note 3) 3,850,000 2,027,718
Net interest income after provision
for loan and lease losses 50,404,374 48,633,544
Other income:
Service charges on deposit accounts 7,333,984 6,585,063
Trust and custodian fees 1,585,250 1,559,296
Brokerage and insurance commissions 1,585,899 841,476
Merchant discount 1,417,512 1,199,035
Other service charges and fees 1,075,777 1,037,246
Other 3,000,813 1,381,036
Investment securities gains 560,001 7,379
Investment securities losses (60,372) (11,994)
Total other income 16,498,864 12,598,537
Other expenses:
Personnel expense 21,165,971 19,366,429
Net occupancy expense 3,021,195 2,759,764
Equipment expense 2,448,962 2,667,942
FDIC special assessment (note 6) 8,400,000 -
Other operating expenses 11,756,672 11,529,775
Merger-related expense - -
Total other expenses 46,792,800 36,323,910
Income before income taxes 20,110,438 24,908,171
Income taxes (note 7) 5,075,100 8,197,800
Net income $ 15,035,338 16,710,371
Income per share $ 1.00 1.12
Weighted average shares outstanding 15,056,975 14,921,146
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME, Continued
(Unaudited)
Nine Months
Ended September 30,
1996 1995
Interest income:
Interest and fees on loans and leases $ 238,041,868 227,018,320
Interest and dividends on investment
securities:
U.S. Treasury 21,743,612 23,573,075
U.S. Government agencies
and corporations 18,778,493 17,445,300
States and political subdivisions
(primarily tax-exempt) 3,390,226 3,859,936
Equity and other securities 1,532,446 1,593,211
Interest on time deposits in other banks 2,234,673 2,156,814
Interest on federal funds sold and
other short-term investments 8,816,526 9,372,406
Total interest income 294,537,844 285,019,062
Interest expense:
Deposits 126,938,541 124,879,958
Short-term borrowed funds 4,201,070 3,504,396
Long-term debt 3,293,833 4,556,438
Total interest expense 134,433,444 132,940,792
Net interest income 160,104,400 152,078,270
Provision for loan and lease
losses (note 3) 9,000,000 5,776,326
Net interest income after provision for
loan and lease losses 151,104,400 146,301,944
Other income:
Service charges on deposit accounts 21,571,156 18,936,983
Trust and custodian fees 4,939,708 4,786,706
Brokerage and insurance commissions 4,200,199 2,684,343
Merchant discount 4,114,222 3,461,431
Other service charges and fees 3,284,330 2,947,767
Other 7,452,758 7,071,070
Investment securities gains 1,895,069 893,566
Investment securities losses (1,384,552) (1,875,388)
Total other income 46,072,890 38,906,478
Other expenses:
Personnel expense 61,419,371 59,038,973
Net occupancy expense 8,788,789 8,338,102
Equipment expense 7,471,534 7,886,293
FDIC special assessment (note 6) 8,400,000 -
Other operating expenses 35,579,691 37,510,063
Merger-related expense - 10,332,596
Total other expenses 121,659,385 123,106,027
Income before income taxes 75,517,905 62,102,395
Income taxes (note 7) 24,366,600 21,305,095
Net income $ 51,151,305 40,797,300
Income per share $ 3.40 2.73
Weighted average shares outstanding 15,041,590 14,947,700
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Unrealized
Gain
(Loss) on
Investment
Additional Securities Management Total
Common Paid-In Retained Available Recognition Shareholders'
Stock Capital Earnings for Sale Plans Equity
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1994 $ 74,984,145 92,283,003 225,499,020 (18,644,387) (2,970,685) 371,151,096
Net income - - 40,797,300 - - 40,797,300
Stock options exercised 326,435 783,403 - - - 1,109,838
Earned portion of management
recognition plans - - - - 914,696 914,696
Purchase and retirement
of shares (550,820) (3,881,430) - - - (4,432,250)
Cash dividends ($1.06
per share) - - (16,429,931) - - (16,429,931)
Change in unrealized gains
(losses), net of
applicable income taxes - - - 21,498,800 - 21,498,800
Balance September 30, 1995 $ 74,759,760 89,184,976 249,866,389 2,854,413 (2,055,989) 414,609,549
Balance December 31, 1995 $ 74,803,580 89,437,260 261,245,259 9,765,025 (1,734,121) 433,517,003
Net income - - 51,151,305 - - 51,151,305
Transactions pursuant to
restricted stock plan - 546,476 - - - 546,476
Stock options exercised 599,160 1,171,131 - - - 1,770,291
Earned portion of management
recognition plans - - - - 742,201 742,201
Purchase and retirement
of shares (95,905) (901,227) - - - (997,132)
Cash dividends ($1.18
per share) - - (17,764,315) - - (17,764,315)
Change in unrealized gains
(losses), net of
applicable income taxes - - - (7,261,042) - (7,261,042)
Other transactions, net (165) (498) - - - (663)
Balance September 30, 1996 $ 75,306,670 90,253,142 294,632,249 2,503,983 (991,920) 461,704,124
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
1996 1995
Operating activities:
Net income $ 51,151,305 40,797,300
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 6,090,780 6,514,978
Provision for loan and lease losses 9,000,000 5,776,326
Net (gain) loss on sales of
investment securities (510,517) 981,822
Net amortization and accretion of
investment securities 4,499,117 4,575,718
Amortization of intangibles and
other assets 3,584,271 4,002,397
Accretion of negative goodwill (2,516,858) (2,516,858)
Sales of loans held for sale 154,765,217 155,834,496
Origination of loans held for sale (147,074,652) (151,168,106)
Decrease in accrued interest receivable 21,946 228,563
Increase in accrued interest payable 1,277,075 4,721,677
Decrease (increase) in other assets (9,879,480) 8,679,522
Increase in other liabilities 4,000,306 6,318,882
Decrease in deferred taxes payable (1,553,000) (635,095)
Vesting of shares held by management
recognition plan 742,201 914,696
Other operating activities, net (296,616) 106,523
Net cash provided by operating activities 73,301,095 85,132,841
Investing activities:
Proceeds from maturities and issuer calls of
investment securities held to maturity 9,898,943 11,705,251
Purchases of investment securities held
to maturity (5,885,111) (8,307,078)
Proceeds from sales of investment securities
available for sale 40,887,124 143,102,969
Proceeds from maturities and issuer calls of
investment securities available for sale 272,128,741 114,626,981
Purchases of investment securities available
for sale (272,363,484) (183,015,465)
Net originations of loans and leases receivable (292,966,247) (118,907,148)
Purchases of premises and equipment (6,376,963) (6,352,159)
Cash acquired, net of cash paid, in
purchase acquisitions -- 33,954,159
Net cash used by investing activities (254,676,997) (13,192,490)
Financing activities:
Net increase in deposit accounts 156,226,017 136,306,254
Cash paid, net of cash received, in branch sale (51,272,198) --
Net decrease in short-term borrowed funds (34,900,572) (35,390,795)
Proceeds from issuance of long-term debt -- 4,230,381
Repayments of long-term debt (20,065,450) (19,096,666)
Exercise of stock options 1,770,291 1,109,838
Purchase and retirement of common stock (997,132) (4,432,250)
Cash dividends (17,764,315) (16,429,931)
Other equity transactions, net (663) --
Net cash provided by financing activities 32,995,978 66,296,831
Net increase (decrease) in cash and
cash equivalents (148,379,924) 138,237,182
Cash and cash equivalents at January 1 569,533,250 402,690,921
Cash and cash equivalents at September 30 $ 421,153,326 540,928,103
Supplemental disclosure of cash flow information:
Interest paid during the period $ 133,156,369 128,219,115
Income taxes paid during the period 29,636,848 27,120,947
Supplemental disclosure of noncash investing
activities:
Investments transferred to available for sale $ -- 159,336,349
Change in market value of securities available
for sale, net of deferred taxes (benefit) of
$(5,365,718) and $12,974,327, respectively (7,261,042) 21,498,800
Loans and lease financing transferred to other
real estate acquired through loan foreclosure 1,322,801 3,842,909
Restricted stock transactions, net of deferred
taxes of $730,211 546,476 --
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
(1) Consolidation
The consolidated financial statements include the accounts and results
of operations of CCB Financial Corporation (the "Corporation") and its
wholly-owned subsidiaries, Central Carolina Bank and Trust Company
("CCB"), Graham Savings Bank, Inc., SSB and Central Carolina Bank -
Georgia. The consolidated financial statements also include the
accounts and results of operations of CCB Investment and Insurance
Service Corporation, CCBDE, Inc. and Southland Associates, Inc.,
wholly-owned subsidiaries of CCB. All significant intercompany
accounts are eliminated in consolidation.
(2) Loans and Lease Financing
A summary of loans and lease financing at September 30, 1996 and 1995
follows:
1996 1995
Commercial, financial and
agricultural $ 384,893,077 515,765,831
Real estate-construction 550,957,005 444,348,922
Real estate-mortgage 2,093,900,978 1,786,423,734
Instalment loans to individuals 373,235,326 302,843,440
Credit card receivables 187,061,474 188,147,480
Lease financing 36,980,183 34,811,564
Gross loans and lease financing 3,627,028,042 3,272,340,971
Less unearned income 4,682,585 4,804,928
Total loans and lease financing $ 3,622,345,457 3,267,536,043
Loans held for sale totaled $7,404,000 and $12,151,000 at September
30, 1996 and 1995, respectively, and are reported at the lower of cost
or market.
At September 30, 1996, impaired loans amounted to $9,620,000 compared
to $5,052,000 at September 30, 1995. The related reserve for loan and
lease losses on these loans amounted to $2,759,000 at September 30,
1996 and $2,410,000 at September 30, 1995.
<PAGE>
CCB Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(3) Reserve for Loan and Lease Losses
Following is a summary of the reserve for loan and lease losses for
the nine months ended September 30, 1996 and 1995:
1996 1995
Balance at beginning of year $ 43,577,725 41,045,712
Provision charged to operations 9,000,000 5,776,326
Recoveries of loans and leases
previously charged-off 1,494,354 1,175,300
Loan and lease losses charged
to reserve (6,817,564) (5,018,208)
Balance at end of period $ 47,254,515 42,979,130
(4) Risk Assets
Following is a summary of risk assets at September 30, 1996 and 1995
(in thousands):
1996 1995
Nonaccrual loans and lease financing $11,785 10,103
Other real estate acquired through
loan foreclosures 2,716 2,935
Accruing loans and lease financing
90 days or more past due 4,223 2,516
Total risk assets $18,724 15,554
(5) Mortgage Servicing Rights
Effective January 1, 1996, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 122, "Accounting for
Mortgage Servicing Rights, an amendment of SFAS No. 65" ("SFAS No.
122"). SFAS No. 122 provides guidance for the recognition of mortgage
servicing rights ("MSRs") as an asset when a mortgage loan is sold or
securitized and servicing rights retained, regardless of how those
servicing rights were acquired. This eliminates the previously
existing accounting distinction between rights to service mortgage
loans for others that are acquired through loan origination activities
and those acquired through purchase transactions. Impairment of
recorded MSRs is measured periodically by applying current fair value
to each stratum of the disaggregated mortgage-servicing portfolio and
comparing the result to the recorded balance. Prior to the adoption
of SFAS No. 122, the Corporation had purchased mortgage servicing
rights which had a carrying value of $916,146 at December 31, 1995.
<PAGE>
CCB Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(5) Mortgage Servicing Rights, Continued
A summary of mortgage servicing rights follows:
Capitalized MSRs at December 31, 1995 $ 916,146
Capitalized during the period 1,916,926
Amortization during the period (278,073)
Capitalized MSRs at September 30, 1996 $2,554,999
The fair value of mortgage servicing rights was $2,773,000.
Additionally, there is value associated with servicing originated
prior to January 1, 1996 for which the carrying value is zero. No
valuation allowance for capitalized MSRs was required at September 30,
1996.
(6) FDIC Special Assessment
On September 30, 1996, Congressional legislation was passed allowing a
special assessment to be levied by the Federal Deposit Insurance
Corporation ("FDIC") to recapitalize the Savings Association Insurance
Fund ("SAIF"). The special assessment is based on the level of SAIF
deposits a financial institution had as of March 31, 1995 subject to a
20% reduction for certain qualifying deposits. The Corporation's
special assessment, assessed on SAIF deposits of $1.4 billion, totaled
$8,400,000 or $5,040,000 after-tax. The impact of the FDIC special
assessment was to reduce net income by $.33 per share.
(7) Income Taxes
During the third quarter, Congressional legislation was passed that
forgave the recapture of savings associations' tax bad debt reserves
which had previously been required upon their conversion to commercial
banks. Graham Savings had approximately $3,880,000 of such tax bad
debt reserves and the forgiveness of the recapture resulted in a tax
benefit of $1,553,000. The impact of the tax benefit was to increase
net income by $.10 per share.
(8) Contingencies
Certain legal claims have arisen in the normal course of business,
which, in the opinion of management and counsel, will have no material
adverse effect on the financial position of the Corporation or its
subsidiaries.
(9) Management Opinion
The financial statements in this report are unaudited. In the opinion
of management, all adjustments (none of which were other than normal
accruals) necessary for a fair presentation of the financial position
and results of operations for the periods presented have been
included.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The purpose of this discussion and analysis is to aid in the
understanding and evaluation of financial conditions and changes
therein and results of operations of CCB Financial Corporation (the
"Corporation") and its wholly-owned subsidiaries, Central Carolina
Bank and Trust Company ("CCB"), Graham Savings Bank, Inc., SSB
("Graham Savings") and Central Carolina Bank-Georgia ("CCB-Ga.")
(collectively "the Banks"), and CCB's wholly-owned subsidiaries, CCB
Investment and Insurance Service Corporation ("CCBI"), CCBDE, Inc. and
Southland Associates, Inc. for the three and nine months ended
September 30, 1996 and 1995. This discussion and analysis is intended
to complement the unaudited financial statements and footnotes and the
supplemental financial data appearing elsewhere in this Form 10-Q, and
should be read in conjunction therewith.
On May 19, 1995, the Corporation effected a merger with Security
Capital Bancorp ("Security Capital"), a $1.2 billion bank-holding
company headquartered in Salisbury, North Carolina. The merger was
accounted for as a pooling-of-interests and was effected through a tax-
free exchange of stock. Merger-related expense of $10.3 million (or
$7.3 million after-tax) was recorded at the date of merger. On June
9, 1995, the Corporation assumed the deposit liabilities of three
branch offices of a North Carolina bank in a transaction accounted for
as a purchase.
During the second quarter of 1996, CCB's subsidiary, 1st Home Mortgage
Acceptance Corporation ("HMAC"), was dissolved and its capital was
returned to CCB. HMAC previously held collateralized mortgage
obligations. The collateralized mortgage obligations, which totaled
$8.9 million at December 31, 1995, were called in February 1996. Also
during the second quarter, CCB sold four of its branch offices to a
North Carolina community bank. The transaction included the sale of
the banking offices and deposits totaling $55.8 million. On October 4,
1996, Graham Savings was merged into CCB and its two branch offices
became CCB branch offices.
Results of Operations - Three Months Ended September 30, 1996 and 1995
Income before non-recurring items amounted to $18.5 million for the
three months ended September 30, 1996 compared to 1995's $16.7
million. Income per share before non-recurring items totaled $1.23 in
1996 compared to $1.12 in the third quarter of 1995. Returns before
non-recurring items on average assets and shareholders' equity were
1.45% and 16.29%, respectively, in 1996 compared to 1995's 1.37% and
16.40%. Non-recurring items impacting the third quarter's income
totaled $3.5 million after-tax and included an FDIC special assessment
of $5.0 million (after-tax) to recapitalize the Savings Association's
Insurance Fund and a tax benefit of $1.5 million from forgiveness of
the recapture of tax bad debt reserves for Graham Savings. Net income
for the three months ended September 30, 1996 amounted to $15.0
million, a decrease of $1.7 million from the same period in 1995. Net
income per share was $1.00 in 1996, a $.12 decrease from the 1995
period. Returns on average assets and average shareholders' equity in
1996 were 1.18% and 13.22%, respectively, compared to 1.37% and
16.40%, respectively, in the 1995 period.
Average Balance Sheets and Net Interest Income Analyses on a taxable
equivalent basis for each of the periods are included in Table 1.
Increases in volume of interest-earning assets were almost offset by
decreases in yield. Consequently, interest income increased only $3.3
million over third quarter 1995 despite the $260.3 million increase in
earning assets. The average rate on interest-earning assets dropped
from 8.65% in 1995 to 8.47%. The mix of interest-earning assets at
September 30, 1996
<PAGE>
Table 1
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis
Three Months Ended September 30, 1996 and 1995
(Taxable Equivalent Basis-In Thousands) (1)
1996
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 3,572,156 81,415 9.08 %
U.S. Treasury and agency
obligations (3) 864,435 14,772 6.83
States and political subdivision
obligations 73,598 1,690 9.18
Equity securities and other
securities (3) 28,235 520 7.37
Federal funds sold and other
short-term investments 204,044 2,823 5.51
Time deposits in other banks 53,256 652 4.87
Total earning assets (3) 4,795,724 101,872 8.47
Non-earning assets:
Cash and due from banks 149,379
Premises and equipment 66,492
All other assets, net 56,515
Total assets $ 5,068,110
Interest-bearing liabilities:
Savings and time deposits $ 3,792,893 42,993 4.51 %
Other short-term borrowed funds 146,135 1,744 4.75
Long-term debt 59,153 983 6.66
Total interest-bearing liabilities 3,998,181 45,720 4.55
Other liabilities and shareholders'
equity:
Demand deposits 517,805
Other liabilities 99,677
Shareholders' equity 452,447
Total liabilities and
shareholders' equity $ 5,068,110
Net interest income and net
interest margin (4) $ 56,152 4.68 %
Interest rate spread (5) 3.92 %
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis, Continued
Three Months Ended September 30, 1996 and 1995
(Taxable Equivalent Basis-In Thousands) (1)
1995
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 3,245,804 76,940 9.42 %
U.S. Treasury and agency
obligations (3) 837,628 14,183 6.77
States and political subdivision
obligations 79,149 1,890 9.55
Equity securities and other
securities (3) 30,693 545 7.11
Federal funds sold and other
short-term investments 286,252 4,314 5.98
Time deposits in other banks 55,897 740 5.25
Total earning assets (3) 4,535,423 98,612 8.65
Non-earning assets:
Cash and due from banks 172,426
Premises and equipment 64,895
All other assets, net 56,517
Total assets $ 4,829,261
Interest-bearing liabilities:
Savings and time deposits $ 3,669,221 43,467 4.70 %
Other short-term borrowed funds 74,833 932 4.94
Long-term debt 82,049 1,485 7.24
Total interest-bearing liabilities 3,826,103 45,884 4.76
Other liabilities and shareholders'
equity:
Demand deposits 502,538
Other liabilities 96,441
Shareholders' equity 404,179
Total liabilities and
shareholders' equity $ 4,829,261
Net interest income and net
interest margin (4) 52,728 4.63 %
Interest rate spread (5) 3.89 %
______________________________
(1) The taxable equivalent basis is computed using 35% federal and
7.75% state tax rates in 1996 and 1995 where applicable.
(2) The average loan and lease financing balances include non-accruing
loans and lease financing. Loan fees of $3,233,000 and $2,726,000 for
1996 and 1995, 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.
<PAGE>
changed from 1995's mix due to higher loan demand. Loans, as a
percentage of earning assets, grew to 75% from 1995's 72%. The cost of
interest-bearing funds fell from 4.76% in 1995 to 4.55% in 1996.
Despite the increased rates paid on retail certificates of deposit and
Individual Retirement Accounts in 1996, the rates paid on savings and
time deposits fell on the aggregate from 4.70% in 1995 to the current
4.51%. The rate paid on short-term borrowed funds also fell from
4.94% to 4.75% due to changes in market rates. The combined effect of
these factors resulted in the net interest margin improving 5 basis
points from 1995 to 1996. The interest rate spread improved from
3.89% for the three months ended September 30, 1995 to 3.92% for the
same period in 1996. Net interest income on a taxable equivalent
basis increased $3.4 million or 6.5% over 1995's level.
The provision for loan and lease losses for the third quarter of 1996
was $3.9 million compared to $2.0 million in 1995. The reserve for
loan and lease losses to loans and lease financing outstanding was
1.30% at September 30, 1996 and 1.32% at September 30, 1995. Net 1996
quarterly loan and lease charge-offs amounted to $2.0 million or .22%
(annualized) of average loans and lease financing which equaled the
.22% (annualized) experienced in 1995. The increased dollar level of
charge-offs in 1996 was due primarily to charge-offs in the consumer
portfolio.
Other income, excluding investment securities transactions, increased
$3.4 million in the third quarter of 1996 to $16.0 million. The
increase was due primarily to a $800,000 increase in service charges
on deposit accounts. The service charge increase resulted from
increased deposit volume, the ATM surcharge imposed in 1996 of $1.00
for each non-customer transaction and repricing of certain deposit
services based upon the results of product profitability analysis.
Brokerage and insurance commissions increased $745,000 from 1995 due
to expansion of investment services provided through CCBI's
association with a registered securities broker-dealer.
During the third quarter of 1996, other operating income increased
$1.6 million which was due primarily to two items. The January 1,
1996 adoption of a new accounting standard requiring the recognition
of mortgage servicing rights as an asset when a mortgage loan is sold
or securitized and servicing rights retained resulted in additional
other income of $455,000 for the third quarter of 1996. In September,
$500,000 of reserves for losses on sales of properties held for sale
by Southland Associates were reversed and taken into other income.
The reserves were reversed based upon the carrying cost of the
properties compared to their expected selling price. Southland
Associates' properties are anticipated to be substantially liquidated
by the end of 1996.
Other expenses, excluding the previously discussed non-recurring FDIC
special assessment of $8.4 million, increased in the 1996 period by
$2.1 million. The increase is almost wholly explained by the increase
in personnel expense which increased $1.8 million from 1995's level.
The increase was due to general salary increases of $1.3 million with
corresponding increases in employee benefits and payroll taxes. In
addition, incentives paid to employees for product promotions such as
home equity lines increased $487,000 over 1995's level. Despite the
increased personnel expense, a comparison of assets per employee shows
continuing improvement from $2.49 million of assets per employee at
September 30, 1995 to $2.60 million per employee for 1996.
As a result of the aforementioned changes, net overhead (noninterest
expense less noninterest income) as a percentage of average assets
decreased to 1.71% for the three months ended September 30, 1996 from
1.95% for the same period in 1995. The Corporation's efficiency ratio
(noninterest expense as a percentage of taxable equivalent net
interest income and other income) significantly improved from 55.60%
for the three months ended September 30, 1995 to 52.85% for the same
period in 1996. The improvement in both of these ratios, both of
which were calculated excluding the impact of non-recurring items,
indicates that the Corporation's revenues are increasing faster than
its expenses.
The following schedule presents noninterest income and expense as a
percentage of average assets for the three months ended September 30,
1996 and 1995.
1996 1995
Noninterest income (1) 1.30 % 1.04
Personnel expense 1.66 1.59
Occupancy and equipment expense .43 .45
Other operating expense (2) .92 .95
Noninterest expense 3.01 2.99
Net overhead 1.71 % 1.95
(1) Includes net gains (losses) on investment securities sales.
(2) Excludes FDIC special assessment of $8.4 million in 1996.
_______________________________
The effective income tax rate was 25.2% in 1996 compared to 32.9% in
the same period of 1995. The lower effective tax rate experienced in
1996 was due to $1.5 million of tax benefit recorded in connection
with forgiveness of the recapture of tax bad debt reserves recorded by
Graham Savings.
Results of Operations - Nine Months Ended September 30, 1996 and 1995
Income before non-recurring items totaled $54.6 million for the nine
months ended September 30, 1996 compared to $48.1 million for the same
period in 1995. Income per share before non-recurring items was $3.63
for the nine months ended September 30, 1996 compared to $3.22 for
1995. Non-recurring items include the previously discussed FDIC
special assessment and tax benefit from forgiveness of the recapture
of tax bad debt reserves, both experienced in 1996, and merger
expenses of $7.3 million (after-tax) incurred in 1995 in conjunction
with the Corporation's merger with Security Capital. Returns of
income before non-recurring items on average assets and average
shareholders' equity were 1.46% and 16.45%, respectively, compared to
1.35% and 16.44% in the 1995 period. Net income for the nine months
ended September 30, 1996 amounted to $51.2 million, an increase of
$10.4 million or 25.4% from the same period in 1995. Net income per
share was $3.40 in 1996, a 24.5% increase from the 1995 period.
Returns of net income on average assets and average shareholders'
equity were 1.37% and 15.40%, respectively, compared to 1.14% and
13.95% in the 1995 period.
Average Balance Sheets and Net Interest Income Analyses on a taxable
equivalent basis for each of the nine month periods are included in
Table 2. Average earning assets increased by $240.7 million or 5.4%
over the 1995 period which was due primarily to internal growth.
Increases in volume of interest-earning assets were offset somewhat by
decreases in yield. Consequently, interest income increased $8.8
million. The mix of average interest-earning assets at September 30,
1996 changed slightly from 1995's mix as a result of higher loan
demand. For the nine months ended September 30, 1996, investment
securities comprised 22% of average earning assets compared to 20% for
1995; average loans absorbed the change and comprise 73% of earning
assets. For interest-bearing liabilities, the decrease in rates paid
on deposits partially offset the increase in interest expense
resulting from increased volume. In addition, higher-rate Federal
Home Loan Bank advances matured in early 1996 in addition to the
collateralized mortgage obligations bearing interest at 11% which were
called during the first quarter of 1996. These two events caused the
rate on long-term debt to fall from 7.09% to 6.71% for the nine months
ended September 30, 1996. The combination of these factors resulted
in the net interest margin decreasing from 4.73% for the nine months
ended September 30, 1995 to 4.70% for 1996. The interest rate spread
fell 7 basis points to 3.95% for 1996. Net interest income on a
taxable equivalent basis increased $7.3 million or 4.6% from 1995's
level.
The provision for loan and lease losses increased to $9.0 million from
$5.8 million in 1995 due to the growth of outstanding loans and lease
financing and higher charge-offs. Net 1996 loan and lease charge-offs
amounted to $5.3 million or .21% (annualized) of average loans and
lease financing compared to .16% (annualized) in 1995.
Other income, excluding net securities gains/losses, increased $5.6
million during the nine months of 1996 to $45.6 million. The increase
was due primarily to a $2.6 million increase in service charges on
deposit accounts resulting from increased deposit volume and the
repricing of deposit services and a $1.5 million increase in brokerage
and insurance commissions from expanded levels of such services. In
addition, the Corporation reversed the reserve for losses on sales of
property held by Southland as previously discussed. Non-recurring
other operating income increases realized in 1995 included a $500,000
gain on the sale of a Security Capital nonbank subsidiary and an
$880,000 gain on the early retirement of a portion of the
Corporation's subordinated debentures.
Net losses on sales of securities (primarily U.S. Treasury and agency
obligations) totaling $982,000 were incurred during 1995 as the
Corporation repositioned the securities portfolio in conjunction with
the Security Capital merger. In 1996, net securities gains totaled
$510,000 for the period.
Other expenses, excluding non-recurring items, increased by $486,000
or less than 1% from the 1995 period. As discussed previously,
personnel expense experienced the largest increase at $2.4 million but
this increase was largely offset by the $3.3 million decrease in
deposit insurance expense resulting from the FDIC lowering the
assessment rate for certain deposits from $.23 per $100 to $.04 per
$100 in the third quarter of 1995. Amortization of intangible assets
decreased $326,000 during 1996 due to the sale of branches to which
the intangible assets related. Other operating expenses increased
$2.4 million due in part to $967,000 of professional services expense
for various operational initiatives, increased marketing expense of
$392,000 from the promotion of new banking products and services and
$314,000 of credit card processing expenses from increased levels of
service. Merger-related expense of $10.3 million (pre-tax) was
incurred during the second quarter of 1995 as previously discussed.
The effective income tax rate for the nine month period was 32.3% in
1996 compared to 34.3% in the same period of 1995. The effective tax
rate in 1995 was higher due to non-deductible merger-related expense
incurred during that year and the $1.5 million of tax benefit recorded
in 1996 for forgiveness of the recapture of the tax bad debt reserves
of Graham Savings.
<PAGE>
Table 2
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis
Nine Months Ended September 30, 1996 and 1995
1996
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 3,462,469 238,465 9.20 %
U.S. Treasury and agency
obligations (3) 871,030 43,835 6.71
States and political subdivision
obligations 75,048 5,249 9.33
Equity securities and other
securities (3) 28,692 1,573 7.31
Federal funds sold and other
short-term investments 221,262 9,014 5.44
Time deposits in other banks 59,482 2,235 5.02
Total earning assets (3) 4,717,983 300,371 8.50
Non-earning assets:
Cash and due from banks 156,535
Premises and equipment 67,444
All other assets, net 59,868
Total assets $ 5,001,830
Interest-bearing liabilities:
Savings and time deposits $ 3,760,258 126,938 4.51 %
Other short-term borrowed funds 119,075 4,201 4.71
Long-term debt 65,544 3,294 6.71
Total interest-bearing liabilities 3,944,877 134,433 4.55
Other liabilities and shareholders'
equity:
Demand deposits 512,391
Other liabilities 100,980
Shareholders' equity 443,582
Total liabilities and
shareholders' equity $ 5,001,830
Net interest income and net
interest margin (4) $ 165,938 4.70 %
Interest rate spread (5) 3.95 %
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis, Continued
Nine Months Ended September 30, 1996 and 1995
1995
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 3,234,469 227,611 9.40 %
U.S. Treasury and agency
obligations (3) 872,546 44,379 6.78
States and political subdivision
obligations 80,672 5,980 9.88
Equity securities and other
securities (3) 30,712 1,634 7.10
Federal funds sold and other
short-term investments 211,308 9,811 6.21
Time deposits in other banks 47,613 2,157 6.06
Total earning assets (3) 4,477,320 291,572 8.70
Non-earning assets:
Cash and due from banks 169,596
Premises and equipment 65,618
All other assets, net 54,982
Total assets $ 4,767,516
Interest-bearing liabilities:
Savings and time deposits $ 3,621,786 124,880 4.61 %
Other short-term borrowed funds 88,408 3,505 5.30
Long-term debt 85,700 4,556 7.09
Total interest-bearing liabilities 3,795,894 132,941 4.68
Other liabilities and shareholders'
equity:
Demand deposits 487,950
Other liabilities 92,580
Shareholders' equity 391,092
Total liabilities and
shareholders' equity $ 4,767,516
Net interest income and net
interest margin (4) 158,631 4.73 %
Interest rate spread (5) 4.02 %
_____________________________
(1) The taxable equivalent basis is computed using 35% federal and
7.75% state tax rates in 1996 and 1995 where applicable.
(2) The average loan and lease financing balances include non-accruing
loans and lease financing. Loan fees of $9,542,000 and $7,323,000 for
1996 and 1995, 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.
<PAGE>
Financial Condition
Total assets have increased $255.7 million since September 30, 1995
due primarily to net internal growth. The majority of the increase
occurred in interest-earning assets. Average assets have increased
from $4.8 billion for the year ended December 31, 1995 to $5.1 billion
for the three months ended September 30, 1996 and compare to $4.8
billion for the three months ended September 30, 1995.
At September 30, 1996, risk assets (consisting of nonaccrual loans and
lease financing, foreclosed real estate, restructured loans and lease
financing and accruing loans 90 days or more past due) amounted to
approximately $18.7 million or .52% of outstanding loans and lease
financing and foreclosed real estate. This compares to approximately
$15.6 million or .48% at September 30, 1995. The increase in risk
assets was due primarily to the first quarter 1996 transfer of one
large commercial credit to the nonaccrual status. In addition, 90
days past due and accruing loans increased $1.5 million from March 31,
1996, primarily in the real estate - construction category. One real
estate - construction loan accounted for approximately a third of the
increase in 90 days past due and accruing category. The reserve for
loan and lease losses to risk assets was 2.52x at September 30, 1996
compared to 2.69x at December 31, 1995 and 2.76x at September 30,
1995.
The Corporation's capital position has historically been strong as
evidenced by the Corporation's ratio of average shareholders' equity
to average total assets of 8.93% and 8.37% for the nine months ended
September 30, 1996 and 1995, respectively. The 1995 ratio is lower
than the Corporation's historical levels due in part to the
Corporation's repurchase and retirement of $20 million (518,069
shares) of common stock during the period from the fourth quarter of
1994 through the second quarter of 1995. Increases in this ratio
since June 30, 1995 are due primarily to the retention of earnings.
The unrealized gain on investment securities available for sale, net
of applicable taxes, decreased $7.3 million from December 31, 1995 in
conjunction with declines in the financial markets. During the third
quarter of 1996, the available for sale portfolio's market value
increased and recovered $1.3 million of the $8.6 million decrease
experienced in the first six months of 1996.
The Corporation has increased its annual cash dividends consistently
over the past 32 years, increasing to $.42 per share for the three
months ended September 30, 1996 from $.38 per share for the same
period in 1995. On October 22, 1996, the Board of Directors of the
Corporation declared a dividend of $.42 payable on January 2, 1997 to
shareholders of record December 16, 1996. Book value increased 10.5%
to $30.65 per share at September 30, 1996 from 1995's level of $27.73.
Bank holding companies are required to comply with the Federal Reserve
Board's risk-based capital guidelines which require a minimum ratio of
total capital to risk-weighted assets of 8%. At least half of the
total capital is required to be "Tier 1" capital, principally
consisting of common shareholders' equity, noncumulative perpetual
preferred stock, and a limited amount of cumulative perpetual
preferred stock less certain goodwill items. The remainder, "Tier 2
capital", may consist of a limited amount of subordinated debt,
certain hybrid capital instruments and other debt securities,
perpetual preferred stock, and a limited amount of the general reserve
for loan and lease losses. In addition to the risk-based capital
guidelines, the Federal Reserve has adopted a minimum leverage capital
ratio under which a bank holding company must maintain a minimum level
of Tier 1 capital to average total consolidated assets of at least 3%
in the case of a bank holding company which has the highest regulatory
examination rating and is not contemplating significant growth or
expansion. All other bank holding companies are expected to maintain
a leverage capital ratio of at least 1% to 2% above the stated
minimum.
The Corporation and the Banks continue to maintain higher capital
ratios than required under regulatory guidelines. The following
schedule shows that the Corporation and the Banks exceed risk-based
capital requirements at September 30, 1996. CCB-Ga.'s capital ratios
have fallen from 1995's levels due to higher asset levels without
corresponding increases in capital.
September 30, Regulatory
Ratio 1996 1995 Minimums
Tier 1 Capital 4.00%
Corporation 11.66% 10.39
CCB 11.40 10.53
Graham Savings 20.80 19.20
CCB-Ga. 11.59 25.82
Total Capital 8.00
Corporation 13.81 12.48
CCB 12.74 12.27
Graham Savings 22.06 20.93
CCB-Ga. 12.84 26.50
Leverage 4.00
Corporation 8.53 7.80
CCB 8.37 7.88
Graham Savings 12.36 9.47
CCB-Ga. 8.41 40.49
Proposed Acquisition
On May 14, 1996, the Corporation announced the signing of a letter of
intent to acquire Salem Trust Company, a $165 million bank
headquartered in Winston-Salem, North Carolina ("Salem Trust"). Salem
Trust has offices in Winston-Salem and Wilmington, North Carolina.
Under the terms of the agreement, the Corporation will issue .41
shares of its common stock in exchange for each share of Salem Trust
in a transaction designed to qualify as a tax-free exchange. On July
1, 1996, a definitive agreement of acquisition was signed by both
companies. The acquisition, which among other things, is subject to
regulatory approval and approval by Salem Trust's shareholders, is
tentatively scheduled to be consummated in the first quarter of 1997.
Salem Trust's operations will become part of CCB.
Accounting Issues
The Corporation adopted Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation ("SFAS No. 123") on
January 1, 1996 which establishes a fair value method of accounting
for such compensation plans. Stock-based compensation plans include
all arrangements by which employees receive shares of stock or other
equity instruments of the employer or in which an entity issues its
equity instruments to acquire goods or services from nonemployees.
Under SFAS No. 123, these types of transactions must be accounted for
based on the fair value of the consideration received or the fair
value of the equity instrument issued, whichever is more reliably
measured. While SFAS No. 123 encourages all entities to adopt the
fair value method of accounting, it does allow an entity to continue
to measure the compensation cost of stock compensation plans using the
intrinsic value based method of accounting prescribed by APB Opinion
No. 25, "Accounting for Stock Issued to Employees". Most fixed stock
option plans (the most common type of stock compensation plan) have no
intrinsic value at grant date, and under APB Opinion No. 25 no
compensation cost is recognized. Entities electing to continue using
the guidance under APB Opinion No. 25 must make pro forma disclosures
of net income and earnings per share as if the fair value method of
accounting proscribed by SFAS No. 123 had been applied. The
Corporation intends to continue measuring stock compensation expense
under APB Opinion No. 25.
In June 1996, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities ("SFAS No. 125"). This Statement provides accounting and
reporting standards for transfers and servicing of financial assets
and extinguishments of liabilities using a financial-components
approach that focuses on control of the asset or liability. SFAS No.
125 requires that an entity recognize only assets it controls and
liabilities it has incurred and should derecognize assets only when
control has been surrendered and derecognize liabilities only when
they have been extinguished. Adoption of SFAS No. 125 will impact
transactions in which the transferor has some continuing involvement
with the assets transferred or with the transferee including recourse,
servicing, agreements to reacquire and options written or held. SFAS
No. 125 is effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after December 31, 1996,
and is to be applied prospectively. Earlier or retroactive
application of SFAS No. 125 is not permitted. The Corporation is in
the process of assessing the impact of adopting SFAS No. 125 but does
not believe that it's adoption will have a material impact upon the
Corporation's financial condition or results of operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
Exhibit 3 - Amended and Restated Bylaws of the Corporation as
of October 22, 1996.
Exhibit 99 - Press release regarding third quarter earnings.
(b). Reports on Form 8-K
A report on Form 8-K dated October 4, 1996 was filed under
Item 5.
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.
CCB FINANCIAL CORPORATION
Registrant
Date: November 13, 1996 /S/ Ernest C. Roessler
Ernest C. Roessler
President and Chief
Executive Officer
Date: November 13, 1996 /S/ W. Harold Parker, Jr.
W. Harold Parker, Jr.
Senior Vice President and
Controller
(Chief Accounting Officer)
BYLAWS
OF
CCB FINANCIAL CORPORATION
Amended and Restated October 22, 1996
Index
ARTICLE I
Offices
Section 1 Principal Office
Section 2 Registered Office
Section 3 Other Offices
ARTICLE II
Meetings of Shareholders
Section 1 Place of Meetings
Section 2 Annual Meetings
Section 3 Substitute Annual Meeting
Section 4 Special Meetings
Section 5 Notice of Meetings
Section 6 Voting Lists
Section 7 Quorum
Section 8 Proxies
Section 9 Voting of Shares
ARTICLE III
Directors
Section 1 General Powers
Section 2 Number, Term and Qualifications
Section 3 Retirement
Section 4 Election of Directors
Section 5 Removal
Section 6 Vacancies
Section 7 Chairman and Vice Chairmen of the Board
Section 8 Compensation
ARTICLE IV
Executive Committee
Section 1 Appointment
Section 2 Meetings
Section 3 General Powers
ARTICLE V
Nominating Committee
ARTICLE VI
Audit Committee and Other Committees
Section 1 Audit Committee
Section 2 Other Committees
ARTICLE VII
Meetings of Directors
Section 1 Regular Meetings
Section 2 Special Meetings
Section 3 Notice of Meetings
Section 4 Waiver of Notice
Section 5 Quorum
Section 6 Manner of Acting
Section 7 Presumption of Assent
Section 8 Informal Action by Directors
ARTICLE VIII
Officers
Section 1 Number
Section 2 Election and Term
Section 3 Removal
Section 4 Compensation
Section 5 President
Section 6 Additional Duties of President
Section 7 Duties of Executive Vice
Presidents, Senior Vice
Presidents, First Vice
Presidents, and Vice Presidents
Section 8 Secretary
Section 9 Assistant Secretaries
Section 10 Controller
Section 11 Assistant Controllers
Section 12 Duties of Other Officers
Section 13 Bonds
ARTICLE IX
Contracts, Loans, Checks and Deposits
Section 1 Contracts
Section 2 Loans
Section 3 Checks and Drafts
Section 4 Deposits
ARTICLE X
Certificates for Shares and Their Transfer
Section 1 Certificates for Shares
Section 2 Transfer of Shares
Section 3 Closing Transfer Books and
Fixing Record Date
Section 4 Lost Certificates
Section 5 Holder of Record
ARTICLE XI
General Provisions
Section 1 Dividends
Section 2 Seal
Section 3 Share Certificates
Section 4 Waiver of Notice
Section 5 Amendments
Section 6 Fiscal Year
Section 7 Notification of Indemnification
Section 8 Indemnification
ARTICLE XII
Additional Constituents
BYLAWS
OF
CCB FINANCIAL CORPORATION
Amended and Restated October 22, 1996
ARTICLE I
Offices
Section 1. Principal Office: The principal office of the
corporation shall be located at 111 Corcoran Street, Durham,
North Carolina.
Section 2. Registered Office: The registered office of
the corporation required by law to be maintained in the State
of North Carolina may be, but need not be, identical with the
principal office.
Section 3. Other Offices: The Corporation may have
offices at such other places, either within or without the
State of North Carolina, as the Board of Directors from time
to time may determine, or as the affairs of the Corporation
may require.
ARTICLE II
Meetings of Shareholders
Section 1. Place of Meetings: All meetings of
shareholders shall be held at the principal office of the
Corporation or at such other place, either within or without
the State of North Carolina, as shall be designated in the
notice of the meeting.
Section 2. Annual Meetings: The annual meeting of
shareholders shall be determined by the Board of Directors of
the Corporation and shall be held during the first six (6)
calendar months of each year, for the purpose of electing
directors of the Corporation and for the transaction of such
other business as properly may be brought before the meeting.
Section 3. Substitute Annual Meeting: If the annual
meeting shall not be held within the period of time designated
by these Bylaws, a substitute annual meeting may be called in
accordance with the provisions of Section 4 of this Article.
A meeting so called shall be designated and treated for all
purposes as the annual meeting.
Section 4. Special Meetings: Special meetings of the
shareholders may be called at any time by the Chairman, any
Vice Chairman, President or by the Board of Directors of the
Corporation.
Section 5. Notice of Meetings: Written or printed notice
stating the time, place, day and hour of the meeting shall be
delivered not less than ten (10) nor more than fifty (50) days
before the date thereof, either personally or by mail, by or
at the direction of the Chairman, Vice Chairman, President,
Secretary or other person calling the meeting, to each
shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the
shareholder at his address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid.
In the case of an annual or substitute annual meeting, the
notice of meeting need not specifically state the business to
be transacted thereat unless such a statement is expressly
required by the provisions of the North Carolina Business
Corporation Act. In the case of a special meeting, the notice
of meeting shall specifically state the purpose or purposes
for which the meeting is called.
When a meeting is adjourned for thirty (30) days or more,
notice of the adjourned meeting shall be given as in the case
of an original meeting. When a meeting is adjourned for less
than thirty (30) days in any one adjournment, it is not
necessary to give any notice of the adjourned meeting other
than by announcement at the meeting at which the adjournment
is taken.
Section 6. Voting Lists: After fixing a record date for a
meeting, the Corporation shall prepare an alphabetical list of
the names of all the shareholders who are entitled to notice
of the shareholders' meeting. The list shall be arranged by
voting group (and within each voting group by class and series
of shares) and show the address of and number of shares held
by each shareholder.
The shareholder list shall be available for inspection by
any shareholder, beginning two business days after notice of
the meeting is given for which the list was prepared and
continuing through the meeting, at the Corporation's principal
office or at a place identified in the meeting notice in the
city where the meeting will be held. A shareholder, or his
agent or attorney, is entitled to inspect and copy the list
during regular business hours and at this own expense, during
the period it is available for inspection.
The Corporation shall make the shareholders' list available
at the meeting, and any shareholder, his agent, or attorney is
entitled to inspect the list at any time during the meeting or
any adjournment thereof.
Section 7. Quorum: The holders of a majority of the
outstanding shares of the Corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders, except that at a substitute
annual meeting of shareholders the number of shares there
represented either in person or by proxy, even though less
than a majority, shall constitute a quorum for the purpose of
such meeting.
The shareholders present at a duly organized meeting may
continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
In the absence of a quorum at the opening of any meeting of
shareholders, such meeting may be adjourned from time to time
by a vote of the majority of the shares voting on the motion
to adjourn; and at any adjourned meeting at which a quorum is
present any business may be transacted which might have been
transacted at the original meeting.
Section 8. Proxies: Shares may be voted either in person
or by one or more agents authorized by a written proxy
executed by the shareholder or by his duly authorized attorney-
in-fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. A proxy is
not valid after the expiration of eleven (11) months from the
date of its execution unless the person executing it specifies
therein the length of time for which it is to continue in
force, or limits its use to a particular meeting, but no proxy
shall be valid after ten (10) years from the date of its
execution.
Section 9. Voting of Shares: Each outstanding share
having voting rights shall be entitled to one vote on each
matter submitted to a vote at a meeting of shareholders.
Except in the election of directors as provided in Section
4 of Article III, the vote of a majority of the shares voted
on any matter at a meeting of shareholders at which a quorum
is present shall be the act of the shareholders on that
matter, unless the vote of a greater number is required by law
or by the Charter or Bylaws of this Corporation. Voting on
all matters except the election of directors shall be by voice
vote or by a show of hands unless the holders of one-tenth of
the shares represented at the meeting shall, prior to the
voting on any matter, demand a ballot vote on that particular
matter.
Shares of its own stock owned indirectly by the Corporation
through a subsidiary corporation or otherwise shall not be
voted and shall not be counted in determining the total number
of shares entitled to vote, except that shares held in a
fiduciary capacity may be voted and shall be counted to the
extent provided by law.
ARTICLE III
Directors
Section 1. General Powers: The business and affairs of
the Corporation shall be managed by the Board of Directors or
by such Executive Committees as the Board may establish
pursuant to these Bylaws.
Section 2. Number, Term and Qualifications: The number of
directors constituting the Board of Directors shall be not
less than five (5) nor more than thirty (30) as may be fixed
or changed from time to time, within the minimum and maximum,
by the shareholders or by the Board of Directors. Directors
need not be residents of the State of North Carolina or
shareholders of the Corporation.
Section 3. Retirement: Each director shall retire at the
regularly scheduled meeting of shareholders following his
attainment of the age of 70 years whether or not such
director's term as a director has expired. Should a
director's responsibilities be diminished from that business
or professional position occupied at the time of the election
as director, then the retirement provision would be the same
as that for reaching the age 70. The Board can annually
exempt the retirement provision by resolution at a regularly
scheduled director's meeting prior to the Annual Shareholder's
Meeting.
Section 4. Election of Directors: Except as provided in
Section 6 of this Article, the directors shall be elected at
the annual meeting of the shareholders; and those persons who
receive the highest number of votes shall be deemed to have
been elected. If any shareholder so demands, election of
directors shall be by secret ballot.
Section 5. Removal: Any director may be removed from
office with cause by a vote of shareholders holding a majority
of the shares entitled to vote at an election of directors.
However, unless the entire Board of Directors is removed, an
individual director may not be removed if the number of shares
voting against the removal would be sufficient to elect a
director if such shares were voted cumulatively at an annual
election. If any directors are so removed, new directors may
be elected at the same meeting.
Section 6. Vacancies: A vacancy occurring in the Board of
Directors, including without limitation a vacancy resulting
from an increase in the number of directors or from the
failure by the shareholders to elect the full authorized
number of directors, may be filled by the shareholders or by
the Board of Directors, whichever group shall act first. If
the directors remaining in office do not constitute a quorum,
the directors may fill the vacancy by the affirmative vote of
a majority of the remaining directors or by the sole remaining
director.
Section 7. Chairman and Vice Chairmen of the Board: There
may be a Chairman of the Board of Directors, and one or more
Vice Chairmen of the Board of Directors, elected by the
Directors from their number at any meeting of the Board of
Directors. The Chairman shall preside at all meetings of the
Board of Directors and perform such other duties as may be
directed by the Board of Directors. The Vice Chairmen, in
their order of appointment, shall perform the duties of the
Chairman in the absence or inability of the Chairman to act.
The Vice Chairmen also shall perform such other duties as may
be directed by the Chairman and the Board of Directors.
Section 8. Compensation: The Board of Directors may
compensate directors for their services as such and may
provide for the payment of all expenses incurred by directors
in attending regular and special meetings of the Board of
Directors.
ARTICLE IV
Executive Committee
Section 1. Appointment: The Board of Directors, by
resolution adopted by a majority of the Board of Directors,
shall annually appoint an Executive Committee, which shall be
composed of at least three (3) of its members, who shall serve
until their successors are appointed.
Section 2. Meetings: The Executive Committee shall meet
at such intervals as shall be established by the Committee,
but not less frequently than monthly. All regular meetings
shall be held at the principal office of the Corporation,
unless the Committee shall designate another location.
Section 3. General Powers: The Executive Committee, to
the extent authorized by law, is empowered to act for and on
behalf of the Board of Directors in any and all matters in the
interim between meetings of the Board of Directors. Within
the powers conferred upon it, action by the Committee shall be
as binding upon the Corporation as if done by the full Board
of Directors. Such action is to be reported to the Board of
Directors for review at its next meeting following such
action.
ARTICLE V
Nominating Committee
Only persons who are nominated in accordance with the
provisions set forth in these bylaws shall be eligible to be
elected as directors at an annual or special meeting of
shareholders. Nomination for election to the Board of
Directors shall be made by or at the direction of the Board of
Directors or a Nominating Committee appointed by the Board of
Directors. Such Nominating Committee shall meet at the
request of the President at least annually and shall include
at least three (3) directors.
Nomination for election of any person to the Board of
Directors may also be made by a shareholder entitled to vote
on such election if written notice of the nomination of such
person shall have been delivered to the Secretary of the
Corporation at the principal office of the Corporation not
less than 60 days nor more than 90 days prior to any annual or
special meeting called for the purpose of electing directors;
provided, however, that if less than 70 days' notice of prior
public disclosure of the date of such meeting is given or made
to shareholders, notice by the shareholder to be timely must
be so received not later than the close of business on the
tenth day following the day on which such notice of the date
of such meeting or such public disclosure was made. Each such
notice shall set forth: (a) the name and address of the
shareholder who intends to make the nomination; (b) a
representation that such shareholder is a holder of record of
shares of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) as
to each person to be nominated (i) such person's name and
address, employment history for the past five years,
affiliations, if any, with the Corporation and other
corporations, the class and number of shares of the
Corporation that are owned of record or beneficially by such
person and information concerning any transactions in such
shares within the prior 60 days, whether such person has been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) within the past five years
and the details thereof, whether such person has been a party
to any proceeding or subject to any judgment, decree or final
order with respect to violations of federal or state
securities laws within the past five years and the details
thereof, and the detail of any contract, arrangement,
understanding or relationships with any person with respect to
any securities of the Corporation, (ii) such person's written
consent to being named as a nominee and to serving as a
director if elected, and (iii) a description of all
arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or
nominations are to be made by the shareholder. The chairman
of the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the forgoing procedure.
ARTICLE VI
Audit Committee and Other Committees
Section 1. Audit Committee: The Board of Directors shall
annually appoint an Audit Committee from among its members,
none of whose voting members shall be salaried officers of the
Corporation, and whose number will include at least three
directors. The Audit Committee will meet at the request of
the Chairman of the Board or the President but not less
frequently than annually. The primary functions of the Audit
Committee are to provide additional assurance regarding the
integrity of the financial information used by the Board of
Directors and distributed to the public by the Corporation and
to oversee and monitor the activities of the Corporation's
internal and external processes.
Section 2. Other Committees: To the extent permitted by
law, the Board of Directors may appoint such other committees,
either standing or special, for such purposes and with such
powers as the Board of Directors may determine.
ARTICLE VII
Meetings of Directors
Section 1. Regular Meetings: A regular meeting of the
Board of Directors shall be held immediately after, and at the
same place as, the annual meeting of shareholders. In
addition, the Board of Directors may provide, by resolution,
the time and place, either within or without the State of
North Carolina, for the holding of additional regular
meetings.
Section 2. Special Meetings: Special meetings of the
Board of Directors may be called by or at the request of the
Chairman, the President or any two directors. Such meetings
may be held either within or without the State of North
Carolina.
Section 3. Notice of Meetings: Regular meetings of the
Board of Directors may be held without notice. Special
meetings of the Board of Directors shall be held upon such
notice sent by any usual means of communication not less than
twenty-four (24) hours before the meeting.
Section 4. Waiver of Notice: Any director may waive
notice of any meeting. The attendance by a director at a
meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express
purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 5. Quorum: A majority of the Board of Directors
fixed by these Bylaws shall constitute a quorum for the
transaction of business at any meeting of the Board of
Directors.
Section 6. Manner of Acting: Except as otherwise provided
in the Bylaws, the act of the majority of the directors
present at a meeting at which a quorum is present shall be the
act of the Board of Directors.
Section 7. Presumption of Assent: A director of the
Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless
his contrary vote is recorded or his dissent is otherwise
entered in the minutes of the meeting or unless he shall file
his written dissent to such action with the person acting as
the Secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary
of the Corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 8. Informal Action by Directors: Action taken by
the directors without a meeting is nevertheless action by the
Board of Directors if written consent to the action in
question is signed by all the directors and filed with the
minutes of the proceedings of the Board of Directors, whether
done before or after the action so taken.
ARTICLE VIII
Officers
Section 1. Number: The officers of the Corporation shall
consist of a Chairman of the Board, one or more Vice Chairmen,
President, one or more Executive Vice Presidents, one or more
Senior Vice Presidents, one or more First Vice Presidents, and
other specifically designated Vice Presidents or Assistant
Vice Presidents as may be determined by the Board of
Directors, a Secretary and Assistant Secretaries, and a
Controller and Assistant Controllers and other titled officers
as may be deemed necessary or advisable by the Board of
Directors, each of which officers or assistant officers
thereto shall have such powers as may be delegated to them by
the Board of Directors and by these Bylaws. Any two or more
offices may be held by the same person, except that no officer
may act in more than one capacity where action of two or more
officers is required.
Section 2. Election and Term: The officers of the
Corporation shall be elected by the Board of Directors. Such
elections may be held at any regular or special meeting of the
Board of Directors. Each officer shall hold office until his
death, resignation, retirement, removal, disqualification, or
his successor is elected and qualified, each such officer
serving at the pleasure of the Board of Directors.
Section 3. Removal: Any officer or agent elected or
appointed by the Board of Directors may be removed by the
Board with or without cause; but such removal shall be without
prejudice to the contract rights, if any, of the person so
removed.
Section 4. Compensation: The compensation of all officers
of the Corporation shall be fixed by the Board of Directors
or, as delegated by the Board, by the Compensation Committee.
Section 5. President: The President, subject to the
control of the Board of Directors, shall supervise and control
the management of the Corporation in accordance with these
Bylaws. He shall be a member of the Board of Directors.
Section 6. Additional Duties of President: The President,
subject to the control of the Board of Directors, shall sign,
with any other proper officer, certificates for shares of the
Corporation and any deeds, leases, mortgages, bonds,
contracts, or other instruments which may be lawfully executed
on behalf of the Corporation, except where required or
permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be
delegated by the Board of Directors to some other officer or
agent, and, in general, he shall perform all duties incident
to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time. The
President shall sign, either manually or by facsimile
signature, all certificates of stock and shall have the power
to make any and all transfers of the securities of the
Corporation.
Section 7. Duties of Executive Vice Presidents, Senior
Vice Presidents, First Vice Presidents and Vice Presidents:
The duties of the Executive Vice Presidents, the Senior Vice
Presidents, First Vice Presidents and other Vice Presidents
shall be to perform the tasks assigned and exercise the powers
of the office given to them as directed by the President and
the Board of Directors.
Section 8. Secretary: The Secretary shall keep accurate
records of the acts and proceedings of all meetings of
shareholders and directors. He shall give all notices
required by law and by the Bylaws. He shall have general
charge of the Corporate books and records and of the Corporate
seal, and he shall affix the Corporate seal to any lawfully
executed instrument requiring it. He shall have general
charge of the stock transfer books of the Corporation and
shall keep, at the registered or principal office of the
Corporation, a record of shareholders showing the name and
address of each shareholder and the number and class of the
shares held by each. He shall sign such instruments as may
require his signature, either manually or by facsimile
signature, and, in general, shall perform all duties incident
to the office of Secretary and such other duties as may be
assigned him from time to time by the President or by the
Board of Directors.
Section 9. Assistant Secretaries: In the absence of the
Secretary in the event of his death, inability or refusal to
act, the Assistant Secretaries in the order of their length of
service as Assistant Secretaries, unless otherwise determined
by the Board of Directors, shall perform the duties of the
Secretary, and when so acting shall have all the powers of and
be subject to all the restrictions upon the Secretary. They
shall perform such other duties as may be assigned to them by
the Secretary, by the President, or by the Board of Directors.
Any Assistant Secretary may sign, with the President or a Vice
President certificates for shares of the Corporation.
Section 10. Controller: The Controller shall have custody
of all funds and securities belonging to the Corporation and
shall receive, deposit or disburse the same under the
direction of the Board of Directors. He shall keep full and
accurate accounts of the finances of the Corporation in books
especially provided for that purpose; and he shall cause a
true statement of its assets and liabilities as of the close
of each fiscal year and of the results of its operations and
of changes in surplus for such fiscal year, all in reasonable
detail, to be made and filed at the registered or principal
office of the Corporation within four (4) months after the end
of such fiscal year and be available for inspection by any
shareholder for a period of ten (10) years; and the Controller
shall mail or otherwise deliver a copy of the latest such
statement to any shareholder upon his written request
therefor. The Controller, in general, shall perform all
duties incident to his office and such other duties as may be
assigned to him from time to time by the President or by the
Board of Directors.
Section 11. Assistant Controllers: The Assistant
Controllers shall perform in the order of their length of
services as Assistant Controllers, in the absence or
disability of the Controller, the duties and exercise the
powers of the Controller, and they shall perform, in general,
such other duties as shall be assigned to them by the
Controller or by the President or by the Board of Directors.
Section 12. Duties of Other Officers: The duties of all
officers and employees not defined and enumerated in the
Bylaws shall be prescribed and fixed by the President and, in
carrying out the authority to do all other acts necessary to
be done to carry out the prescribed duties, unless otherwise
ordered by the Board of Directors, shall include but not be
limited to the power to sign, certify or endorse notes,
certificates of indebtedness, deeds, checks, drafts or other
contracts for and on behalf of the Corporation and/or affix
the seal of the Corporation to such documents as may require
it.
Section 13. Bonds: The Board of Directors may by
resolution require any or all officers, agents and employees
of the Corporation to give bond to the Corporation, with
sufficient sureties, conditioned on the faithful performance
of the duties of their respective offices or positions, and to
comply with such other conditions as may from time to time be
required by the Board of Directors.
ARTICLE IX
Contracts, Loans, Checks and Deposits
Section 1. Contracts: The Board of Directors may
authorize any officer or officers, agent or agents, to enter
into any contract, lease, or to execute and deliver any
instrument on behalf of the Corporation, and such authority
may be general or confined to specific instances. The Board
of Directors may enter into employment contracts for any
length of time it deems wise.
Section 2. Loans: No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the
Board of Directors. Such authority may be general or specific
in nature and scope.
Section 3. Checks and Drafts: All checks, drafts or other
orders for the payment of money issued in the name of the
Corporation shall be signed by such officer or officers, agent
or agents, of the Corporation and in such manner as from time
to time shall be determined by resolution of the Board of
Directors.
Section 4. Deposits: All funds of the Corporation not
otherwise employed from time to time shall be deposited to the
credit of the Corporation in such depositories as the Board of
Directors shall direct.
ARTICLE X
Certificates for Shares and Their Transfer
Section 1. Certificates for Shares: Certificates
representing shares of the Corporation shall be issued in such
form as the Board of Directors shall determine to every
shareholder for the fully paid shares owned by him. These
certificates shall be signed by the President or any Vice
President and the Secretary, an Assistant Secretary, Treasurer
or an Assistant Treasurer. They shall be consecutively
numbered or otherwise identified; and the name and address of
the persons to whom they are issued, with the number of shares
and the date of issue, shall be entered on the stock transfer
books of the Corporation.
Section 2. Transfer of Shares: Transfer of shares shall
be made on the stock transfer books of the Corporation only
upon surrender of the certificates for the shares sought to be
transferred by the record holder thereof or by his duly
authorized agent, transferee, or legal representative. All
certificates surrendered for transfer shall be canceled before
new certificates for the transferred shares shall be issued.
Section 3. Closing Transfer Books and Fixing Record Date:
For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors may
provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty (50) days.
If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at
least ten (10) days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any
such determination of shareholders, such record date in any
case to be not more than fifty (50) days and, in case of a
meeting of shareholders, not less than ten (10) days
immediately preceding the date on which the particular action,
requiring such determination of shareholders, is to be taken.
If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such
dividend is adopted, as the case may be, shall be the record
date for such determination of shareholders.
When a determination of shareholders entitled to vote at
any meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof except where the determination has been made through
the closing of the stock transfer books and the stated period
of closing has expired.
Section 4. Lost Certificates: The Board of Directors may
authorize the issuance of a new share certificate in place of
a certificate claimed to have been lost or destroyed, upon
receipt of an affidavit to such fact from the person claiming
the loss or destruction. When authorizing such issuance of a
new certificate, the Board may require the claimant to give
the Corporation a bond in such sum as the Board may direct to
indemnify the Corporation against loss from any claim with
respect to the certificate claimed to have been lost or
destroyed; or the Board may, by resolution reciting the
circumstances justifying such action, authorize the issuance
of the new certificate without requiring such a bond.
Section 5. Holder of Record: The Corporation may treat as
absolute owner of shares the person in whose name the shares
stand of record on its books just as if that person had full
competency, capacity and authority to exercise all rights of
ownership irrespective of any knowledge or notice to the
contrary or any description indicating a representative,
pledge or other fiduciary relation or any reference to any
other instrument or to the rights of any other person
appearing upon its record or upon the share certificate,
except that any person furnishing to the Corporation proof of
his appointment as a fiduciary shall be treated as if he were
a holder of record of its shares.
ARTICLE XI
General Provisions
Section 1. Dividends: The Board of Directors from time to
time may declare, and the Corporation may pay, the dividends
on its outstanding shares in the manner and upon the terms and
conditions provided by law and by its Charter.
Section 2. Seal: The corporate seal of the corporation
shall consists of two concentric circles between which is
"chartered 1982 Durham, North Carolina" and in the center of
which is the name of the corporation; and such seal, in the
form approved and adopted by the Board of Directors, shall be
the corporate seal of the corporation.
Section 3. Share Certificates: The share certificates of
this corporation shall be in a form approved by the Board of
Directors and shall indicate thereon a reference to any and
all restrictive conditions of said shares.
Section 4. Waiver of Notice: Whenever any notice is
required to be given to any shareholder or director under the
provisions of the North Carolina Business Corporation Act or
under the provisions of the Charter or Bylaws of this
Corporation, a waiver thereof in writing signed by the person
or persons entitled to such notice, whether before or after
the time stated therein, shall be equivalent to the giving of
such notice.
Section 5. Amendments: Except as otherwise provided
herein, these Bylaws may be amended or repealed and new bylaws
may be adopted by the affirmative vote of a majority of the
directors then holding office at any regular or special
meeting of the Board of Directors.
Except as may be approved by the shareholders, the Board of
Directors shall have no power to adopt a bylaw: (1) providing
for the management of the Corporation otherwise than by the
Board of Directors or its Executive Committee; (2) increasing
or decreasing the number of directors; (3) classifying and
staggering the election of directors; or (4) requiring more
than a majority of the voting shares for a quorum at a meeting
of the shareholders or more than a majority of the votes cast
to constitute action by the shareholders, except where higher
percentages are required by law.
Section 6. Fiscal Year: The fiscal year of the
Corporation shall be fixed by the Board of Directors.
Section 7. Notification of Indemnification: The Secretary
of the Corporation, or his duly authorized delegate, shall
give written notice of any proposed change or amendment to
ARTICLE XI, Section 7 of the bylaws to each and every director
of this Corporation and of its subsidiary and affiliated
Corporations, and to each and every officer of said
Corporations who would be affected thereby. Such notice shall
be delivered by first class mail to the interested party at
his or her address as disclosed in the records of the
Corporation with which he/she is affiliated. Such notice
shall be delivered at least fourteen (14) days prior to the
date on which action upon the proposed amendment is to be
taken, and shall set forth the substance of the amendment as
proposed.
Section 8. Indemnification: Any person who is or was
serving as a member of the Board of Directors of CCB Financial
Corporation, or who is or was serving, at the request of CCB
Financial Corporation, as a member of the Board of Directors
of a subsidiary or affiliated corporation of CCB Financial
Corporation, shall be indemnified by CCB Financial Corporation
to the fullest extent from time to time permitted by the law
of North Carolina and/or any applicable federal law, against
liability including, but not limited to, judgments, decrees,
fines, penalties, excise taxes and amounts paid in settlement
actually and reasonably incurred by him/her, and litigation
expenses, including costs and reasonable attorney fees,
incurred by the Director arising out of his or her status as a
Director or out of his or her activities in that capacity.
Indemnification as provided in this Article shall, to the
fullest extent permitted by law, extend to and cover all such
liability and litigation expenses incurred by the Director in
connection with, or in consequence of, any threatened,
pending, or completed action, suit or other proceeding,
whether civil or criminal, administrative or investigative,
formal or informal, and whether or not brought by or on behalf
of CCB Financial Corporation or otherwise, to which the
Director is made, or is threatened to be made, a party by
reason of the fact that he or she is or was a Director of CCB
Financial Corporation or is or was a Director of a subsidiary
or affiliated corporation serving at the request of CCB
Financial Corporation.
To the fullest extent permitted by law, expenses incurred
by a Director in defending any such action, suit, or
proceeding shall be paid by CCB Financial Corporation in
advance of the final disposition of such action, suit, or
proceeding upon receipt by the Corporation of an unsecured,
written promise by the Director or on the Director's behalf to
repay any and all amounts so paid by CCB Financial Corporation
unless it shall ultimately be determined that the Director is
entitled to be indemnified by CCB Financial Corporation
against such expenses.
All officers of the Corporation shall have rights co-equal
and co-extensive to those provided for Directors herein.
PROVIDED, however, that no indemnification shall be
permitted for any Director or Officer included herein against
liability or litigation expenses which may be incurred by such
Director or Officer on account of any activities of such
Director or Officer known or believed by the Director or
Officer at the time taken to be clearly in conflict with the
best interest of CCB Financial Corporation or any other
corporation, partnership, joint venture, trust or other
enterprise which the Director or Officer is or was serving or
employed by at the request of CCB Financial Corporation.
The Board of Directors is hereby authorized to take any and
all such action as may be necessary and appropriate to
authorize or in CCB Financial Corporation to carry out the
purposes of this Article including, but not limited to,
authorizing the Corporation to enter into indemnification
agreements with Directors and Officers included herein, or
such other agreements as may be necessary and appropriate to
carry out the purposes of this Article.
The rights provided for Directors and stated Officers
herein shall be in addition to and not exclusive of any other
rights to which they may be or become entitled under the
General Statutes of North Carolina, or under any other
statutes, insurance policies, or other agreements of any kind.
ARTICLE XII
Additional Constituents
In connection with the exercise of its or their judgment in
determining what is in the best interests of the Corporation
and its shareholders, the Board of Directors of the
Corporation, any committee of the Board of Directors, or any
individual director may, but shall not be required to, in
addition to considering the long-term and short-term interests
of the shareholders, consider any of the following factors and
any other factors which it or they deem relevant: (i) the
social and economic effects of the matter to be considered on
the Corporation and its subsidiaries, its and their employees,
depositors, customers, and creditors, and the communities in
which the Corporation and its subsidiaries operate or are
located; and (ii) when evaluating a business combination or a
proposal by another person or persons to make a business
combination or a tender or exchange offer or any other
proposal relating to a potential change of control of the
Corporation or any of its subsidiaries or the sale of all or
substantially all of the assets of the Corporation or any of
its subsidiaries (x) the business and financial condition and
earnings prospects of the acquiring person or persons,
including, but not limited to, debt service and other existing
financial obligations, financial obligations to be incurred in
connection with the acquisition, and other likely financial
obligations of the acquiring person or persons, and the
possible effect of such conditions upon the Corporation and
its subsidiaries and the communities in which the Corporation
and its subsidiaries operate or are located, (y) the
competence, experience, and integrity of the acquiring person
or persons and its or their management, and (z) the prospects
for successful conclusion of the business combination, offer
or proposal. The provisions of this Article shall be deemed
solely to grant discretionary authority to the directors and
shall not be deemed to provide to any constituency the right
to be considered. As used in this Article, the term "person"
means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other
entity; and, when two or more persons act as a partnership,
limited partnership, syndicate, or other group acting in
concert for the purpose of acquiring, holding, voting or
disposing of securities of the Corporation, such partnership,
limited partnership, syndicate or group shall also be deemed a
"person" for purposes of this Article.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF CCB FINANCIAL CORPORATION AND SUBSIDIARIES
AS OF SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000714612
<NAME> CCB FINANCIAL CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 190,217
<INT-BEARING-DEPOSITS> 60,167
<FED-FUNDS-SOLD> 170,800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 904,857
<INVESTMENTS-CARRYING> 74,197
<INVESTMENTS-MARKET> 77,292
<LOANS> 3,622,345
<ALLOWANCE> 47,255
<TOTAL-ASSETS> 5,157,844
<DEPOSITS> 4,397,815
<SHORT-TERM> 143,058
<LIABILITIES-OTHER> 96,221
<LONG-TERM> 59,046
0
0
<COMMON> 75,307
<OTHER-SE> 386,397
<TOTAL-LIABILITIES-AND-EQUITY> 5,157,844
<INTEREST-LOAN> 238,042
<INTEREST-INVEST> 45,445
<INTEREST-OTHER> 11,051
<INTEREST-TOTAL> 294,538
<INTEREST-DEPOSIT> 126,939
<INTEREST-EXPENSE> 134,433
<INTEREST-INCOME-NET> 160,104
<LOAN-LOSSES> 9,000
<SECURITIES-GAINS> 511
<EXPENSE-OTHER> 121,659
<INCOME-PRETAX> 75,518
<INCOME-PRE-EXTRAORDINARY> 75,518
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,151
<EPS-PRIMARY> 3.40
<EPS-DILUTED> 3.40
<YIELD-ACTUAL> 3.95
<LOANS-NON> 11,785
<LOANS-PAST> 4,223
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 9,620
<ALLOWANCE-OPEN> 43,578
<CHARGE-OFFS> 6,818
<RECOVERIES> 1,495
<ALLOWANCE-CLOSE> 47,255
<ALLOWANCE-DOMESTIC> 47,255
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 6,946
</TABLE>
NEWS RELEASE
For Further Information Please Contact:
W. Harold Parker, Jr. Phone: (919) 683-7631
FOR IMMEDIATE RELEASE October 15, 1996
CCB FINANCIAL CORPORATION REPORTS THIRD QUARTER EARNINGS
Durham, North Carolina----CCB Financial Corporation (NYSE:CCB) reported
income before non-recurring items for the quarter ending September 30, 1996
of $1.23 per share, an increase of 9.8% over the $1.12 earned in the comparable
period of 1995. The 1996 amount excludes the net effect of forgiveness of the
recapture of tax bad debt reserves of a former savings bank subsidiary and
impact of a one-time FDIC special assessment to recapitalize the Savings
Association Insurance Fund ("SAIF"). Including the net effect of the above,
net income per share for the current quarter was $1.00.
For the first nine months of 1996, excluding the above recapture forgiveness
and special assessment, income per share increased by 12.7% to $3.63 from
$3.22, excluding merger-related expense in 1995. Including the effect of the
above items, net income per share was $3.40 compared to $2.73 in 1995, an
increase of 24.5%.
E. C. Roessler, President and CEO of CCB Financial Corporation, commented:
"We are pleased with our record operating results in the third quarter as
reflected by our primary performance measures. We are also pleased to see
resolution of the recapitalization of the SAIF and its positive effects on
our future performance from reduced deposit insurance premiums."
Roessler further commented: "Our listing on the New York Stock Exchange
during the third quarter has improved service to our shareholders. There is no
long-term negative economic impact from damages caused by Hurricane Fran,
and we remain on track for 1996 to be another record year for CCB Financial
Corporation."
CCB Financial Corporation is the bank holding company for Central Carolina
Bank and Trust Company which operates 154 offices located primarily in the
Piedmont section of North Carolina.
<PAGE>
CCB FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended
Income Statement 9/30/96 6/30/96 3/31/96 12/31/95 9/30/95
<S> <C> <C> <C> <C> <C>
Loan and lease income (TE) $ 81,415 78,893 78,157 78,340 76,940
Securities income (TE) 16,982 16,430 17,245 16,563 16,618
Other interest income 3,475 4,145 3,629 5,665 5,054
Total interest income (TE) 101,872 99,468 99,031 100,568 98,612
Savings/NOW expense 1,831 2,135 2,378 2,576 2,589
Money market account expense 13,363 12,599 12,114 13,081 12,603
Jumbo CD expense 3,934 3,448 3,969 4,517 4,303
Consumer time deposit expense 23,865 23,499 23,803 23,929 23,972
Interest expense on deposits 42,993 41,681 42,264 44,103 43,467
Short-term borrowed funds expense 1,744 1,591 866 916 932
Long-term debt expense 983 1,064 1,247 1,444 1,485
Total interest expense 45,720 44,336 44,377 46,463 45,884
Net interest income (TE) 56,152 55,132 54,654 54,105 52,728
Provision for loan and lease losses 3,850 3,150 2,000 2,407 2,027
Net interest income after
provision (TE) 52,302 51,982 52,654 51,698 50,701
Service charges on deposits 7,334 7,282 6,955 6,663 6,585
Other service charges and fees 1,075 1,104 1,105 1,066 1,037
Trust income 1,586 1,783 1,571 1,557 1,560
Brokerage and insurance commissions 1,586 1,440 1,174 1,118 841
Merchant discount 1,417 1,414 1,283 1,205 1,199
Accretion of negative goodwill 839 839 839 839 839
Other 2,163 1,542 1,232 931 542
Investment securities gains 560 32 1,303 50 7
Investment securities losses (61) (6) (1,318) (46) (12)
Total other income 16,499 15,430 14,144 13,383 12,598
Personnel expense 21,166 19,841 20,412 20,259 19,366
Occupancy 3,021 2,835 2,933 2,392 2,760
Equipment 2,448 2,414 2,609 2,313 2,668
Foreclosed property expense 73 138 119 222 160
Deposit and other insurance 1,064 550 532 1,129 684
FDIC special assessment (1) 8,400 - - - -
Amortization of intangible assets 910 909 985 1,131 1,132
Other 9,711 10,482 10,107 9,671 9,554
Merger-related expense (1) - - - - -
Total other expenses 46,793 37,169 37,697 37,117 36,324
Income before income taxes (TE) 22,008 30,243 29,101 27,964 26,975
Tax equivalent adjustment 1,898 1,924 2,012 2,073 2,067
Income before income taxes 20,110 28,319 27,089 25,891 24,908
Income taxes (1) 5,075 9,975 9,317 8,828 8,198
Net income $ 15,035 18,344 17,772 17,063 16,710
Per Share Data
Net income (1) $ 1.00 1.22 1.18 1.14 1.12
Cash dividends .42 .38 .38 .38 .38
Book value 30.65 29.98 29.25 28.98 27.73
Tangible book value 28.68 27.95 26.92 26.57 25.23
Market value (2):
High 55.00 54.75 55.75 56.50 51.63
Low 49.50 49.75 49.25 48.50 41.75
Close 54.75 51.25 50.25 55.50 51.13
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
CCB FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Three Months Ended
Ratios 9/30/96 6/30/96 3/31/96 12/31/95 9/30/95
<S> <C> <C> <C> <C> <C>
Income before forgiveness of
recapture of tax bad debt reserves
and FDIC special assessment (1):
Return on average assets 1.45 % 1.48 1.45 1.37 1.37
Return on average equity 16.29 16.69 16.39 16.25 16.40
Net income:
Return on average assets 1.18 1.48 1.45 1.37 1.37
Return on average equity 13.22 16.69 16.39 16.25 16.40
Net interest margin 4.68 4.69 4.71 4.64 4.63
Average equity to average assets 8.93 8.85 8.83 8.43 8.37
Operating Efficiency Ratios
As a percentage of average
assets (excluding FDIC
special assessment (1)):
Noninterest income 1.30 % 1.24 1.15 1.07 1.04
Personnel expense 1.66 1.60 1.66 1.63 1.59
Occupancy and equipment expense .43 .42 .45 .38 .45
Other operating expense .92 .97 .96 .98 .95
Noninterest expense 3.01 2.99 3.07 2.99 2.99
Net overhead (noninterest exp. -
noninterest inc.) 1.71 % 1.75 1.92 1.92 1.95
Noninterest expense (excluding
FDIC special assessment (1))
as a percentage of net interest
income (TE) and other income 52.85 % 52.68 54.79 55.00 55.60
Average assets per employee
(in millions) $ 2.60 2.58 2.56 2.55 2.49
Average Balances
Assets $ 5,068,110 4,995,543 4,941,110 4,940,463 4,829,261
Loans and lease financing (all
domestic) 3,572,156 3,445,480 3,368,565 3,302,486 3,245,804
Investment securities:
Taxable (3) 892,670 881,947 924,628 890,235 868,321
Tax-exempt 73,598 75,260 76,302 78,498 79,149
Earning assets (3) 4,795,724 4,709,016 4,648,355 4,653,709 4,535,423
Deposits:
Demand deposits (noninterest-
bearing) 517,805 525,401 493,909 512,374 502,538
Savings/NOW accounts 514,208 515,680 512,338 506,055 486,870
Money market accounts 1,361,312 1,324,860 1,308,572 1,319,853 1,268,740
Jumbo CD's 275,887 249,415 277,631 292,896 269,533
Consumer time deposits 1,641,486 1,642,660 1,656,368 1,632,452 1,644,078
Total deposits 4,310,698 4,258,016 4,248,818 4,263,630 4,171,759
Short-term borrowed funds 146,135 133,302 77,490 79,033 74,833
Long-term debt 59,153 63,596 73,954 80,255 82,049
Interest-bearing liabilities 3,998,181 3,929,513 3,906,353 3,910,544 3,826,103
Shareholders' equity 452,447 442,055 436,145 416,531 404,179
Share Data
Common shares outstanding 15,061,334 15,051,625 15,059,409 14,960,716 14,951,952
Weighted average shares
outstanding 15,056,975 15,055,922 15,011,702 14,953,153 14,921,146
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
CCB FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
As Of Or For The Three Months Ended
Reserve For Loan Losses 9/30/96 6/30/96 3/31/96 12/31/95 9/30/95
<S> <C> <C> <C> <C> <C>
Beginning balance $ 45,423 44,218 43,578 42,979 42,726
Provision for loan and lease losses 3,850 3,150 2,000 2,407 2,027
Recoveries 510 476 508 359 345
Charge-offs (2,529) (2,421) (1,868) (2,167) (2,119)
Ending balance $ 47,254 45,423 44,218 43,578 42,979
Non-Performing and Risk Assets
Nonperforming assets:
Beginning balance $ 14,533 15,529 12,083 13,038 12,584
Activity during the quarter:
Additions 1,795 2,114 4,712 1,986 1,727
Payments or sales (1,754) (2,864) (1,217) (2,903) (972)
Return to performing status - - - - (279)
Charge-offs or write-downs (73) (246) (49) (38) (22)
Net increase (decrease) (32) (996) 3,446 (955) 454
Ending balance comprised of:
Nonaccrual loans and leases 11,785 11,980 13,283 9,616 10,103
Foreclosed real estate 2,716 2,553 2,246 2,467 2,935
Total nonperforming assets 14,501 14,533 15,529 12,083 13,038
Restructured loans and lease
financing - - - - -
Ninety days past due and accruing 4,223 4,229 2,768 4,120 2,516
Total risk assets $ 18,724 18,762 18,297 16,203 15,554
Asset Quality Ratios
Total risk assets to:
Total loans and foreclosed
real estate .52 % .54 .54 .53 .48
Total assets .36 .37 .36 .35 .32
Loan loss reserve to total
risk assets 2.52 x 2.42 2.42 2.69 2.76
Net charge-offs to average
loans (annualized) .22 % .23 .16 .22 .22
Loan loss reserve to total loans 1.30 1.30 1.30 1.30 1.32
Other Information
Number of banking offices 154 154 157 155 153
Number of employees 1,960 1,940 1,932 1,940 1,937
Number of ATM's 134 130 129 122 120
Intangible assets:
Goodwill $ 25,847 26,593 29,614 30,391 31,215
Deposit base premium 3,855 4,018 5,473 5,680 6,034
Mortgage servicing rights 2,555 2,208 1,554 916 964
Negative goodwill 23,077 23,916 24,755 25,594 26,433
Parent Company's investment
in subsidiaries 469,629 459,650 454,738 449,542 430,447
Cash dividends 6,325 5,718 5,721 5,684 5,679
</TABLE>
Page 3
<PAGE>
CCB FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Nine Months Ended
September 30 Increase (Decrease)
Income Statement 1996 1995 Amount %
Loan and lease income (TE) $ 238,465 227,611 10,854 4.8
Securities income (TE) 50,657 51,993 (1,336) (2.6)
Other interest income 11,249 11,968 (719) (6.0)
Total interest income (TE) 300,371 291,572 8,799 3.0
Savings/NOW expense 6,344 8,383 (2,039) (24.3)
Money market account expense 38,076 37,452 624 1.7
Jumbo CD expense 11,351 13,121 (1,770) (13.5)
Consumer time deposit expense 71,167 65,924 5,243 8.0
Interest expense on deposits 126,938 124,880 2,058 1.6
Short-term borrowed funds expense 4,201 3,505 696 19.9
Long-term debt expense 3,294 4,556 (1,262) (27.7)
Total interest expense 134,433 132,941 1,492 1.1
Net interest income (TE) 165,938 158,631 7,307 4.6
Provision for loan and lease losses 9,000 5,776 3,224 55.8
Net interest income after
provision (TE) 156,938 152,855 4,083 2.7
Service charges on deposits 21,571 18,937 2,634 13.9
Other service charges and fees 3,284 2,948 336 11.4
Trust income 4,940 4,787 153 3.2
Brokerage and insurance commissions 4,200 2,684 1,516 56.5
Merchant discount 4,114 3,461 653 18.9
Accretion of negative goodwill 2,517 2,517 - N/A
Other 4,937 4,554 383 8.4
Investment securities gains 1,895 893 1,002 112.2
Investment securities losses (1,385) (1,875) 49 26.1
Total other income 46,073 38,906 7,167 18.4
Personnel expense 61,419 59,039 2,380 4.0
Occupancy 8,789 8,338 451 5.4
Equipment 7,471 7,886 (415) (5.3)
Foreclosed property expense 330 1,021 (691) (67.7)
Deposit and other insurance 2,146 5,471 (3,325) (60.8)
FDIC special assessment (1) 8,400 - 8,400 N/A
Amortization of intangible assets 2,804 3,127 (323) (10.3)
Other 30,300 27,891 2,409 8.6
Merger-related expense (1) - 10,333 (10,333)(100.0)
Total other expenses 121,659 123,106 (1,447) (1.2)
Income before income taxes (TE) 81,352 68,655 12,697 18.5
Tax equivalent adjustment 5,834 6,553 (719) (11.0)
Income before income taxes 75,518 62,102 13,416 21.6
Income taxes (1) 24,367 21,305 3,062 14.4
Net income $ 51,151 40,797 10,354 25.4
Per Share Data
Net income $ 3.40 2.73 .67 24.5
Cash dividends per share 1.18 1.06 .12 11.3
Page 4
<PAGE>
CCB FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Nine Months Ended
September 30
Ratios 1996 1995
Income before forgiveness of
recapture of tax bad debt
reserves, FDIC special assessment
and merger-related expense (1):
Return on average assets 1.46 % 1.35
Return on average equity 16.45 16.44
Net income:
Return on average assets 1.37 1.14
Return on average equity 15.40 13.95
Net interest margin 4.70 4.73
Average equity to average assets 8.87 8.20
<TABLE>
<CAPTION>
As of September 30 YTD Averages
Balance Sheet Data 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Assets $ 5,157,844 4,902,122 5,001,830 4,767,516
Loans and lease financing 3,622,345 3,267,536 3,462,469 3,234,469
Securities held to maturity:
Book value 74,197 81,424 75,214 82,010
Market value 77,292 85,173 - -
Securities available for sale (3) 904,857 879,661 899,556 901,920
Earning assets (3) 4,828,141 4,583,177 4,717,983 4,477,320
Deposits:
Demand deposits (noninterest-
bearing) 554,294 516,259 512,391 487,950
Savings/NOW accounts 530,470 499,917 514,076 487,309
Money market accounts 1,378,819 1,281,674 1,331,690 1,241,588
Jumbo CD's 286,328 291,051 267,674 282,372
Consumer time deposits 1,647,903 1,642,459 1,646,818 1,610,517
Total deposits 4,397,814 4,231,360 4,272,649 4,109,736
Short-term borrowed funds 143,059 79,426 119,075 88,408
Subordinated notes (qualifying
debt) 32,985 32,985 32,985 33,422
Other long-term debt 26,061 47,871 32,559 52,278
Interest-bearing liabilities 4,045,625 3,875,382 3,944,877 3,795,894
Shareholders' equity 461,704 414,610 443,582 391,092
Fair value adjustment included
in shareholders' equity 2,504 2,854 4,359 (6,742)
</TABLE>
Nine Months Ended
September 30
Share Data 1996 1995
Weighted average shares outstanding 15,041,590 14,947,700
Reserve For Loan Losses
Beginning balance $ 43,578 41,046
Provision for loan and lease losses 9,000 5,776
Recoveries 1,494 1,175
Charge-offs (6,818) (5,018)
Ending balance $ 47,254 42,979
Net charge-offs to average
loans (annualized) .21 % .16
Page 5
<PAGE>
CCB FINANCIAL CORPORATION
Financial Summary
Unaudited
(In Thousands Except Share and Per Share Data)
Nine Months Ended
September 30
Operating Efficiency Ratios 1996 1995
As a percentage of average assets
(excluding FDIC special
assessment and
merger-related expense (1)):
Noninterest income 1.23 % 1.09
Personnel expense 1.64 1.66
Occupancy and equipment expense .43 .45
Other operating expense .95 1.05
Noninterest expense 3.02 3.16
Net overhead (noninterest expense -
noninterest income) 1.79 % 2.07
Noninterest expense (excluding
FDIC special assessment and
merger-related expense (1)) as
a percentage of net interest
(TE) and other income 53.42 % 57.09
Average assets per employee
(in millions) $ 2.57 2.42
As Of
September 30
1996 1995
Risk-Adjusted Capital (Estimated)
On-balance sheet risk assets $ 3,540,246 3,293,308
Off-balance sheet risk assets 152,563 305,386
Total risk-adjusted assets 3,692,809 3,598,694
Tier I capital 429,367 373,757
Tier II capital 79,145 75,518
Total capital 508,512 449,275
Tier I capital ratio 11.63 % 10.39
Total capital ratio 13.77 12.48
Leverage capital ratio 8.52 7.80
(1) During the third quarter of 1996, a tax benefit of
$1,553,000 was recorded for forgiveness of the recapture of
tax bad debt reserves of a savings bank subsidiary. Also
during the third quarter of 1996, an FDIC special assessment
of $8,400,000 to recapitalize the Savings Association
Insurance Fund was recorded. The after-tax effect of these
transactions was to decrease net income by $3,487,000 or $.23
per share. Merger-related expense incurred in 1995 included
severance and other employee benefit costs, costs related to
branch closures, systems conversion costs and other
restructuring and transaction related expenses for the
Corporation's merger with Security Capital Bancorp on May 19,
1995. The after-tax effect of the 1995 merger-related expense
was $7,304,000 or $.49 per share.
(2) New York Stock Exchange Symbol: CCB
(3) Average balances exclude the mark-to-market adjustment
for Statement of Financial Accounting Standards No. 115.
Page 6
