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, 1998
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 40,551,135
(Class of Stock) (Shares outstanding as of November 10, 1998)
<PAGE>
CCB FINANCIAL CORPORATION
FORM 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 1998, December 31, 1997 and
September 30, 1997 3
Consolidated Statements of Income
Three and Nine Months Ended September 30, 1998 and 1997 4
Consolidated Statements of Shareholders' Equity
Nine Months Ended September 30, 1998 and 1997 5
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1998 and 1997 6
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 1998 and 1997 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 19
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 20
Signatures 21
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CCB Financial Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited) (Unaudited)
September December September
30, 31, 30,
1998 1997 1997
(In Thousands Except Share Data)
Assets:
Cash and due from banks $ 256,065 277,469 217,669
Time deposits in other banks 53,073 19,875 34,247
Federal funds sold and other
short-term investments 222,000 122,000 185,000
Investment securities:
Available for sale (amortized
costs of $1,252,408,
$1,359,376 and $1,349,774) 1,283,103 1,382,107 1,370,441
Held to maturity (market values
of $85,955, $87,002 and $86,769) 80,334 81,617 81,677
Loans and lease financing (notes
2 and 4) 5,360,547 5,093,569 4,975,169
Less reserve for loan and
lease losses (note 3) 71,543 67,594 66,619
Net loans and lease financing 5,289,004 5,025,975 4,908,550
Premises and equipment 91,251 86,035 84,914
Other assets (note 4) 132,439 143,450 144,117
Total assets $ 7,407,269 7,138,528 7,026,615
Liabilities:
Deposits:
Demand (noninterest-bearing) $ 820,760 740,338 699,773
Savings and NOW accounts 728,622 727,108 693,480
Money market accounts 1,776,916 1,636,683 1,618,311
Jumbo time deposits 430,970 392,435 384,696
Consumer time deposits 2,459,721 2,488,033 2,444,878
Total deposits 6,216,989 5,984,597 5,841,138
Short-term borrowed funds 235,759 276,436 298,024
Long-term debt 176,220 100,686 100,919
Other liabilities 91,672 95,449 125,079
Total liabilities 6,720,640 6,457,168 6,365,160
Shareholders' equity (note 5):
Serial preferred stock. Authorized
10,000,000 shares; none issued -- -- --
Common stock of $5 par value.
Authorized 100,000,000 shares;
40,598,757, 41,552,824
and 41,507,050 shares issued 202,994 207,764 207,534
Additional paid-in capital 86,788 143,784 143,304
Retained earnings 378,006 315,864 297,998
Accumulated other comprehensive
income 18,841 13,980 12,682
Less: Unearned common stock held
by management recognition plans -- (32) (63)
Total shareholders' equity 686,629 681,360 661,455
Total liabilities and
shareholders' equity $ 7,407,269 7,138,528 7,026,615
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended September 30,
1998 1997
(In Thousands Except Per Share Data)
Interest income:
Interest and fees on loans
and lease financing $ 119,402 112,131
Interest and dividends on
investment securities:
U.S. Treasury 6,546 7,992
U.S. Government agencies
and corporations 12,887 13,895
States and political subdivisions
(primarily tax-exempt) 1,177 1,208
Equity and other securities 801 753
Interest on time deposits
in other banks 690 466
Interest on federal funds sold
and other short-term investments 4,180 2,487
Total interest income 145,683 138,932
Interest expense:
Deposits 58,938 58,123
Short-term borrowed funds 2,952 3,769
Long-term debt 2,714 1,637
Total interest expense 64,604 63,529
Net interest income 81,079 75,403
Provision for loan and lease
losses (note 3) 4,778 5,355
Net interest income after provision
for loan and lease losses 76,301 70,048
Other income:
Service charges on deposit accounts 13,919 11,252
Trust and custodian fees 2,392 2,189
Sales and insurance commissions 2,937 2,625
Merchant discount 2,272 1,785
Other service charges and fees 1,925 2,120
Other operating income 4,737 2,898
Investment securities gains 406 195
Investment securities losses - (23)
Total other income 28,588 23,041
Other expenses:
Personnel expense 31,507 28,501
Net occupancy expense 4,185 3,731
Equipment expense 3,673 3,129
Other operating expense 19,529 15,105
Merger-related expense - 16,253
Total other expenses 58,894 66,719
Income before income taxes 45,995 26,370
Income taxes 15,632 11,062
Net income $ 30,363 15,308
Earnings per common share (note 5):
Basic $ .75 .37
Diluted .74 .37
Weighted average shares
outstanding (note 5):
Basic 40,598 41,482
Diluted 41,083 42,002
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME, Continued
(Unaudited)
Nine Months Ended September 30,
1998 1997
(In Thousands Except Per Share Data)
Interest income:
Interest and fees on loans
and lease financing $ 351,610 327,762
Interest and dividends on
investment securities:
U.S. Treasury 21,179 23,861
U.S. Government agencies
and corporations 40,291 41,733
States and political subdivisions
(primarily tax-exempt) 3,559 3,636
Equity and other securities 2,344 2,309
Interest on time deposits
in other banks 1,495 2,232
Interest on federal funds sold
and other short-term investments 11,404 7,435
Total interest income 431,882 408,968
Interest expense:
Deposits 175,384 170,778
Short-term borrowed funds 9,022 11,759
Long-term debt 7,400 3,528
Total interest expense 191,806 186,065
Net interest income 240,076 222,903
Provision for loan and lease
losses (note 3) 11,564 12,904
Net interest income after provision
for loan and lease losses 228,512 209,999
Other income:
Service charges on deposit accounts 39,749 32,965
Trust and custodian fees 7,455 6,091
Sales and insurance commissions 8,511 7,171
Merchant discount 6,415 5,209
Other service charges and fees 5,862 5,669
Other operating income 13,452 11,827
Investment securities gains 1,416 338
Investment securities losses (27) (94)
Total other income 82,833 69,176
Other expenses:
Personnel expense 94,061 85,548
Net occupancy expense 11,831 11,726
Equipment expense 10,401 9,457
Other operating expense 55,611 47,121
Merger-related expense - 17,269
Total other expenses 171,904 171,121
Income before income taxes 139,441 108,054
Income taxes 49,818 40,375
Net income $ 89,623 67,679
Earnings per common share (note 5):
Basic $ 2.18 1.64
Diluted 2.16 1.62
Weighted average shares
outstanding (note 5):
Basic 41,026 41,409
Diluted 41,562 41,895
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Nine Months Ended September 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other Management
Additional Compre- Recog- Total
Common Paid-In Retained hensive nition Shareholders'
Stock Capital Earnings Income Plans Equity
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1996,
as originally reported $ 103,169 140,617 361,072 7,329 (738) 611,449
Common stock issued in 1998
in two-for-one stock split 103,169 - (103,169) - - -
Balance December 31, 1996,
as restated 206,338 140,617 257,903 7,329 (738) 611,449
Net income - - 67,679 - - 67,679
Stock options exercised,
net of shares tendered 1,144 2,343 (572) - - 2,915
Transactions pursuant to
restricted stock plan 54 373 (27) - - 400
Earned portion of manage-
ment recognition plans - - - - 675 675
Other transactions, net (2) (29) 2 - - (29)
Cash dividends ($.655
per share) - - (26,987) - - (26,987)
Other comprehensive income -
Unrealized gains on
securities, net of
reclassification
adjustment (note 1) - - - 5,353 - 5,353
Balance September 30, 1997 $ 207,534 143,304 297,998 12,682 (63) 661,455
Balance December 31, 1997 $ 207,764 143,784 315,864 13,980 (32) 681,360
Net income - - 89,623 - - 89,623
Stock options exercised,
net of shares tendered 813 1,469 (402) - - 1,880
Tax benefit from stock
options exercised - 444 - - - 444
Transactions pursuant to
restricted stock plan 19 281 (10) - - 290
Shares repurchased and
retired (5,601) (59,180) 2,801 - - (61,980)
Earned portion of manage-
ment recognition plans - - - - 32 32
Other transactions, net (1) (10) - - - (11)
Cash dividends ($.73
per share) - - (29,870) - - (29,870)
Other comprehensive income -
Unrealized gains on
securities, net of
reclassification
adjustment (note 1) - - - 4,861 - 4,861
Balance September 30, 1998 $ 202,994 86,788 378,006 18,841 - 686,629
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
Operating activities:
Net income $ 89,623 67,679
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and accretion, net 15,011 17,227
Provision for loan and lease losses 11,564 12,904
Net (gain) loss on sales of investment
securities (1,389) (244)
Sale of securitized mortgage loans at par - 25,658
Sales of loans held for sale 411,945 138,320
Origination of loans held for sale (448,541) (132,610)
Changes in:
Accrued interest receivable 1,785 (1,702)
Accrued interest payable (901) 17,032
Other assets 20,006 (1,621)
Other liabilities (7,232) (4,032)
Other operating activities, net (14,600) (4,213)
Net cash provided by operating activities 77,271 134,398
Investing activities:
Proceeds from:
Maturities and issuer calls of investment
securities held to maturity 1,267 2,568
Sales of investment securities available
for sale 36,037 190,356
Maturities and issuer calls of investment
securities available for sale 422,981 337,426
Purchases of:
Investment securities available for sale (355,028) (516,594)
Premises and equipment (13,335) (6,855)
Net originations of loans and leases
receivable (234,667) (396,111)
Net cash acquired (paid) in acquisitions
(dispositions) - 14,577
Net cash used by investing activities (142,745) (374,633)
Financing activities:
Net increase in deposit accounts 232,392 99,684
Net decrease in short-term borrowed funds (40,677) (58,815)
Proceeds from issuance of long-term debt 76,140 50,129
Repayments of long-term debt (606) (7,764)
Issuances of common stock from exercise
of stock options, net 1,880 2,915
Purchase and retirement of common stock (61,980) -
Other equity transactions, net (11) (29)
Cash dividends paid (29,870) (26,987)
Net cash provided by financing activities 177,268 59,133
Net increase (decrease) in cash and
cash equivalents 111,794 (181,102)
Cash and cash equivalents at beginning of year 419,344 618,018
Cash and cash equivalents at end of period $ 531,138 436,916
Supplemental disclosures of cash flow
information:
Interest paid during the period $ 192,708 169,033
Income taxes paid during the period $ 52,842 43,928
Supplemental disclosures of noncash investing
and financing activities:
Change in market value of securities available
for sale, net of deferred tax benefit of
$(3,103) and $(3,191), respectively $ 4,861 5,353
Transactions pursuant to restricted stock plan
and stock option plan, net of deferred tax
expense of $484 in 1998 $ 290 400
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 1998 and 1997
(Unaudited)
(1) Consolidation and Presentation
The accompanying unaudited consolidated financial statements of CCB
Financial Corporation (the "Corporation") have been prepared in
accordance with the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, the statements reflect all adjustments necessary for a
fair presentation of the financial position, results of operations and
cash flows of the Corporation on a consolidated basis, and all such
adjustments are of a normal recurring nature. These financial
statements and the notes thereto should be read in conjunction with
the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997. Operating results for the nine month period ended
September 30, 1998, are not necessarily indicative of the results that
may be expected for the year ending December 31, 1998.
Consolidation
The consolidated financial statements include the accounts and results
of operations of the Corporation and its wholly-owned subsidiaries,
Central Carolina Bank and Trust Company ("CCB"), American Federal
Bank, FSB ("AmFed") and Central Carolina Bank - Georgia (collectively
the "Subsidiary Banks"). The consolidated financial statements also
include the accounts and results of operations of the wholly-owned
subsidiaries of CCB (CCB Investment and Insurance Service Corporation,
Salem Trust Company, CCBDE, Inc. and Southland Associates, Inc.) and
AmFed (American Service Corporation of S.C., Mortgage North, AMFEDDE,
Inc. and Finance South, Inc.). All significant intercompany accounts
are eliminated in consolidation.
Earnings Per Share
Basic earnings per share ("EPS") excludes dilution and is computed by
dividing income available to common shareholders by the weighted
average number of common shares outstanding during each period.
Diluted EPS reflects the potential dilution that would have occurred
if securities or other contracts to issue common stock were exercised
or converted into common stock. The Corporation's diluted EPS is
computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding plus dilutive
stock options (as computed under the treasury stock method) assumed to
have been exercised during each period.
Comprehensive Income
Comprehensive income is the change in the Corporation's equity during
the period from transactions and other events and circumstances from
non-owner sources. Total comprehensive income is comprised of net
income and other comprehensive income and for the nine months ended
September 30, 1998 and 1997 amounted to $94,484,000 and $73,032,000,
respectively.
The Corporation's "other comprehensive income" for the nine months
ended September 30, 1998 and 1997 and "accumulated other comprehensive
income" as of September 30, 1998 and 1997 are comprised solely of
unrealized gains and losses on certain investments in debt and equity
securities.
<PAGE>
CCB Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(1) Consolidation and Presentation - Continued
Other comprehensive income for the nine months ended September 30,
1998 and 1997 follows (in thousands):
1998 1997
Unrealized holding gains arising during period $ 6,250 5,597
Less reclassification adjustment for gains
included in net income 1,389 244
Net unrealized gains on securities $ 4,861 5,353
(2) Loans and Lease Financing
A summary of loans and lease financing at September 30, 1998 and 1997
follows (in thousands):
1998 1997
Commercial, financial and agricultural $ 674,518 667,338
Real estate-construction 850,772 703,595
Real estate-mortgage 3,096,401 2,860,612
Instalment loans to individuals 486,568 501,847
Revolving credit 208,343 204,695
Lease financing 50,586 42,794
Gross loans and lease financing 5,367,188 4,980,881
Less unearned income 6,641 5,712
Total loans and lease financing $ 5,360,547 4,975,169
Mortgage loans held for sale totaled $62,783,000 and $19,734,000 at
September 30, 1998 and 1997, respectively, and are reported at the
lower of cost or market. During the first quarter of 1997, the
Subsidiary Banks securitized $138,306,000 of mortgage loans of which
$112,648,000 were retained in the available for sale portfolio at
March 31, 1997 and the remainder were sold at par. The retained
securitized loans were sold during the third quarter of 1997 at a
nominal gain.
At September 30, 1998, impaired loans amounted to $16,011,000 compared
to $10,174,000 at September 30, 1997. The related reserve for loan
and lease losses on these loans amounted to $2,392,000 at September
30, 1998 and $2,225,000 at September 30, 1997. During the nine months
ended September 30, 1998 and 1997, loans totaling $1,973,000 and
$1,680,000, respectively, were transferred to "other assets" due to
loan foreclosure.
<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, 1998 and 1997 (in thousands):
1998 1997
Balance at beginning of year $67,594 61,257
Provision charged to operations 11,564 12,904
Recoveries of loans and leases
previously charged-off 1,881 2,590
Loan and lease losses charged to reserve (9,496) (10,132)
Balance at end of period $71,543 66,619
(4) Risk Assets
Following is a summary of risk assets at September 30, 1998 and 1997
(in thousands):
1998 1997
Nonaccrual loans and lease financing $ 16,936 15,032
Other real estate acquired through
loan foreclosures 1,152 2,218
Restructured loans and lease financing 756 798
Accruing loans and lease financing
90 days or more past due 2,987 3,219
Total risk assets $ 21,831 21,267
(5) Share and Per Share Data
On July 21, 1998, the Corporation's Board of Directors approved a two-
for-one stock split to be effected in the form of a 100% common stock
dividend for each outstanding share. The stock dividend was issued on
October 1, 1998, to shareholders of record as of September 15, 1998.
The consolidated financial statements have been adjusted for the
impact of the stock dividend as if it had occurred at the beginning of
the earliest period presented.
(6) 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.
<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"), American Federal Bank, FSB ("AmFed")
and Central Carolina Bank-Georgia ("CCB-Ga.") (collectively the
"Subsidiary Banks"), and CCB's wholly-owned subsidiaries, CCB
Investment and Insurance Service Corporation ("CCBIISC"), Salem Trust
Company, CCBDE, Inc. and Southland Associates, Inc., and AmFed's
wholly-owned subsidiaries, American Service Corporation of S.C.,
Mortgage North, AMFEDDE, Inc., and Finance South, Inc., for the three
and nine months ended September 30, 1998 and 1997. 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 July 21, 1998, the Corporation's Board of Directors approved a two-
for-one stock split to be effected in the form of a 100% common stock
dividend for each outstanding share. The stock dividend was issued on
October 1, 1998, to shareholders of record as of September 15, 1998.
The following discussion and accompanying unaudited financial
statements have been restated to include the impact of the stock
dividend as if it had occurred at the beginning of the earliest period
presented.
Results of Operations - Three Months Ended September 30, 1998 and 1997
Net income for the three months ended September 30, 1998 amounted to
$30.4 million compared to 1997's $15.3 million. Basic income per
share totaled $.75 in 1998 compared to $.37 in the third quarter of
1997. Returns on average assets and shareholders' equity were 1.65%
and 18.03%, respectively, in 1998 compared to 1997's .87% and 9.33%.
Merger-related expense incurred during the third quarter of 1997
totaled $11.9 million after-tax and related to the Corporation's
acquisition of AmFed. Excluding the impact of the merger-related
expense, basic income per share totaled $.66 and returns on average
assets and shareholders' equity were 1.54% and 16.55%, respectively.
Average Balance Sheets and Net Interest Income Analyses on a taxable
equivalent basis for each of the periods are included in Table 1.
Interest-earning assets increased by $338.2 million or 5.1% in the
1998 period. The overall yield on earning assets decreased 4 basis
points to 8.44% from 1997's 8.48% primarily due to decreased loan
yields. The cost of interest-bearing funds decreased by 14 basis
points in the 1998 period to 4.44% due primarily to the lower rates
paid for savings and time deposits, 4.37% in 1998 versus 4.51% in
1997. The interest rate spread and net interest margin increased by
10 and 9 basis points to 4.00% and 4.76%, respectively, compared with
one year ago. Net interest income on a taxable equivalent basis
increased by $5.6 million or 7.2%.
The provision for loan and lease losses for the third quarter of 1998
was $4.8 million compared to $5.4 million in 1997. The reserve for
loan and lease losses to loans and lease financing outstanding was
1.33% at September 30, 1998 compared to 1997's 1.34%. Current quarter
loan and lease charge-offs amounted to $2.9 million or .22%
(annualized) of average loans and lease financing compared to .14%
(annualized) in the third quarter of 1997. Excluding revolving credit
net charge-offs, the ratios drop to .12% and .04% (annualized),
respectively.
<PAGE>
Table 1
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis
Three Months Ended September 30, 1998 and 1997
(Taxable Equivalent Basis - In Thousands) (1)
1998
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 5,306,203 119,453 8.95 %
U.S. Treasury and agency
obligations (3) 1,180,592 20,785 7.03
States and political subdivision
obligations 80,449 1,764 8.76
Equity and other securities (3) 47,006 946 8.05
Federal funds sold and other
short-term investments 302,605 4,302 5.64
Time deposits in other banks 54,634 690 5.01
Total earning assets (3) 6,971,489 147,940 8.44
Non-earning assets:
Cash and due from banks 196,340
Premises and equipment 89,928
All other assets, net 58,466
Total assets $ 7,316,223
Interest-bearing liabilities:
Savings and time deposits $ 5,353,499 58,938 4.37 %
Short-term borrowed funds 240,564 2,952 4.86
Long-term debt 176,291 2,714 6.11
Total interest-bearing liabilities 5,770,354 64,604 4.44
Other liabilities and shareholders' equity:
Demand deposits 785,276
Other liabilities 92,349
Shareholders' equity 668,244
Total liabilities and
shareholders' equity $ 7,316,223
Net interest income and net
interest margin (4) $ 83,336 4.76 %
Interest rate spread (5) 4.00 %
<PAGE>
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis, Continued
Three Months Ended September 30, 1998 and 1997
(Taxable Equivalent Basis - In Thousands) (1)
1997
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 4,924,014 112,201 9.06 %
U.S. Treasury and agency
obligations (3) 1,356,011 23,324 6.88
States and political subdivision
obligations 81,806 1,811 8.85
Equity and other securities (3) 46,422 898 7.74
Federal funds sold and other
short-term investments 179,993 2,579 5.68
Time deposits in other banks 45,063 466 4.10
Total earning assets (3) 6,633,309 141,279 8.48
Non-earning assets:
Cash and due from banks 181,461
Premises and equipment 85,714
All other assets, net 81,939
Total assets $ 6,982,423
Interest-bearing liabilities:
Savings and time deposits $ 5,116,326 58,123 4.51 %
Short-term borrowed funds 293,878 3,769 5.37
Long-term debt 100,957 1,637 6.48
Total interest-bearing liabilities 5,511,161 63,529 4.58
Other liabilities and shareholders' equity:
Demand deposits 691,200
Other liabilities 129,074
Shareholders' equity 650,988
Total liabilities and
shareholders' equity $ 6,982,423
Net interest income and net
interest margin (4) 77,750 4.67 %
Interest rate spread (5) 3.90 %
(1) The taxable equivalent basis is computed using 35% federal and
applicable state tax rates in 1998 and 1997.
(2) The average loan and lease financing balances include non-accruing
loans and lease financing. Loan fees of $4,497,000 and $3,012,000 for
1998 and 1997, 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>
Other income, excluding investment securities transactions, increased
$5.3 million or 23.2% in the third quarter of 1998 to $28.2 million.
This increase is partially explained by a $2.7 million increase in
service charges on deposit accounts. The service charge increase
resulted primarily from increased deposit volumes and repricing of
certain deposit services based upon the results of product
profitability analyses. In addition, there was a $1.8 million
increase in the Corporation's secondary mortgage income due to
increased mortgage originations. Merchant discount increased $487,000
from 1997 due to an increased volume of business and a review of the
pricing structure. Sales and insurance commissions increased $312,000
from 1997 due to a higher volume of brokerage transactions. CCBIISC
provides brokerage services to two other financial institutions
through a correspondent bank program initiated in 1997 which provides
additional commission income. Trust and custodian fees increased
$203,000 due to growth in assets managed.
Other expenses, excluding 1997's previously discussed pre-tax merger-
related expense of $16.3 million, increased in the 1998 period by $8.4
million or 16.7%. This is partially explained by a $3.0 million
increase in personnel expense from 1997's level. The increase was due
to general salary increases and a larger workforce which had the
combined effect of increasing salary expense by $2.5 million with
corresponding increases in employee benefits and payroll taxes. In
addition, professional services fees increased $1.7 million primarily
due to expenses attributable to the Year 2000 project (discussed below
in "Financial Condition"). Occupancy and equipment increased $1.0
million, office supplies and postage increased $1.0 million, and
telecommunications expense increased $488,000; all such increases were
due to growth of the Subsidiary Banks' operations.
As a result of the aforementioned changes, net overhead (noninterest
expense less noninterest income) as a percentage of average assets was
1.65% for the three months ended September 30, 1998 compared to 1.56%
for the same period in 1997. The Corporation's efficiency ratio
(noninterest expense as a percentage of taxable equivalent net
interest income and other income) was 52.62% for the three months
ended September 30, 1998 compared to 50.07% for the same period in
1997.
The following schedule presents noninterest income and expense as a
percentage of average assets, excluding non-recurring items, for the
three months ended September 30, 1998 and 1997.
1998 1997
Noninterest income 1.55 % 1.31
Personnel expense 1.71 1.62
Occupancy and equipment expense .43 .39
Other operating expense 1.06 .86 (1)
Noninterest expense 3.20 2.87
Net overhead 1.65 % 1.56
_______________________________
(1) Excludes merger-related expense of $16.3 million.
The effective income tax rate was 34.0% in 1998 compared to 41.9% in
the same period of 1997. The 1997 rate was higher due to certain non-
deductible merger-related expense.
<PAGE>
Results of Operations - Nine Months Ended September 30, 1998 and 1997
Net income for the nine months ended September 30, 1998 amounted to
$89.6 million, an increase of $21.9 million from the same period in
1997. Basic income per share was $2.18 in 1998, a $.54 or 32.9%
increase from the 1997 period. Returns on average assets and
shareholders' equity in 1998 were 1.65% and 17.78%, respectively,
compared to 1.31% and 14.35%, respectively, in the 1997 period. Non-
recurring items recognized during the nine months ended September 30,
1997 were merger-related expense totaling $12.7 million (after-tax)
and $1.4 million of gain (after-tax) generated from the sale of an
AmFed subsidiary. Excluding the impact of these non-recurring items,
basic income per share totaled $1.91 and returns on average assets and
shareholders' equity were 1.53% and 16.74%, respectively.
Average Balance Sheets and Net Interest Income Analyses on a taxable
equivalent basis for each of the periods are included in Table 2.
Interest-earning assets increased by $348.6 million or 5.3% in the
1998 period. Despite a 7 basis point drop in the yield on loans,
increased yields on investment securities and other earning assets and
a favorable shift in the mix of interest-earning assets resulted in a
2 basis point increase in the yield on earning assets. The cost of
interest-bearing funds decreased by 8 basis points in the 1998 period
to 4.47%. As a result of these favorable changes, the interest rate
spread and net interest margin each increased 10 basis points to 4.01%
and 4.77%, respectively, compared with one year ago. Net interest
income on a taxable equivalent basis increased by $17.3 million or
7.5%.
The provision for loan and lease losses for the first nine months of
1998 was $11.6 million compared to $12.9 million in 1997. Net charge-
offs as a percentage of average loans were .20% in 1998 and .21% in
1997 (annualized). Excluding revolving credit net charge-offs, the
ratios drop to .10% and .08% (annualized), respectively. Revolving
credit net charge-offs have improved from 1997's 2.98% to the 2.59%
(annualized) experienced in 1998.
Other income, excluding investment securities transactions and the
previously discussed gain on the sale of a subsidiary, increased $14.8
million or 22.2% in the first nine months of 1998 to $81.4 million.
The increase was due in part to a $6.8 million increase in service
charges on deposit accounts. The deposit service charge increase
resulted primarily from increased deposit volumes and repricing of
certain deposit services based upon the results of product
profitability analyses. The Corporation's secondary mortgage income
increased $3.9 million due to increased mortgage originations. Other
increases over 1997's levels included trust and custodian fees ($1.4
million), sales and insurance commissions ($1.3 million) and merchant
discount ($1.2 million) for reasons discussed previously.
Other expenses, excluding the previously discussed 1997 merger-related
expense of $17.3 million, increased in the 1998 period by $18.1
million or 11.7%. This is partially explained by the increase in
personnel expense which increased $8.5 million from 1997's level. As
discussed previously, the increase was due to general salary increases
and a larger workforce with corresponding increases in employee
benefits and payroll taxes. Professional services fees and data
processing expense increased $3.2 million due in part to the
previously mentioned Year 2000 project. Printing and office supplies
increased $1.6 million and telecommunications expense increased
$871,000 from 1997 due to general growth of the Subsidiary Banks'
operations.
<PAGE>
Table 2
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis
Nine Months Ended September 30, 1998 and 1997
(Taxable Equivalent Basis - In Thousands) (1)
1998
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 5,215,474 351,780 9.01 %
U.S. Treasury and agency
obligations (3) 1,244,164 65,657 7.03
States and political subdivision
obligations 80,831 5,327 8.78
Equity and other securities (3) 46,688 2,772 7.92
Federal funds sold and other
short-term investments 278,223 11,735 5.64
Time deposits in other banks 41,899 1,495 4.77
Total earning assets (3) 6,907,279 438,766 8.48
Non-earning assets:
Cash and due from banks 201,391
Premises and equipment 88,037
All other assets, net 63,443
Total assets $ 7,260,150
Interest-bearing liabilities:
Savings and time deposits $ 5,325,626 175,384 4.40 %
Short-term borrowed funds 246,574 9,022 4.89
Long-term debt 161,028 7,400 6.13
Total interest-bearing liabilities 5,733,228 191,806 4.47
Other liabilities and shareholders' equity:
Demand deposits 756,142
Other liabilities 96,842
Shareholders' equity 673,938
Total liabilities and
shareholders' equity $ 7,260,150
Net interest income and net
interest margin (4) $ 246,960 4.77 %
Interest rate spread (5) 4.01 %
<PAGE>
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis, Continued
Nine Months Ended September 30, 1998 and 1997
(Taxable Equivalent Basis - In Thousands) (1)
1997
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 4,825,288 327,979 9.08 %
U.S. Treasury and agency
obligations (3) 1,360,206 69,712 6.84
States and political subdivision
obligations 82,078 5,449 8.85
Equity and other securities (3) 47,792 2,769 7.73
Federal funds sold and other
short-term investments 183,252 7,607 5.55
Time deposits in other banks 60,051 2,232 4.97
Total earning assets (3) 6,558,667 415,748 8.46
Non-earning assets:
Cash and due from banks 178,251
Premises and equipment 85,945
All other assets, net 76,395
Total assets $ 6,899,258
Interest-bearing liabilities:
Savings and time deposits $ 5,081,917 170,778 4.49 %
Short-term borrowed funds 310,408 11,759 5.32
Long-term debt 72,109 3,528 6.52
Total interest-bearing liabilities 5,464,434 186,065 4.55
Other liabilities and shareholders' equity:
Demand deposits 679,664
Other liabilities 124,502
Shareholders' equity 630,658
Total liabilities and
shareholders' equity $ 6,899,258
Net interest income and net
interest margin (4) 229,683 4.67 %
Interest rate spread (5) 3.91 %
(1) The taxable equivalent basis is computed using 35% federal and
applicable state tax rates in 1998 and 1997.
(2) The average loan and lease financing balances include non-accruing
loans and lease financing. Loan fees of $12,421,000 and $9,828,000 for
1998 and 1997, 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>
As a result of the aforementioned changes, net overhead as a
percentage of average assets, excluding the impact of the 1997 non-
recurring items, improved to 1.63% for the nine months ended September
1998 from 1.68% for the same period in 1997. The Corporation's
efficiency ratio was 52.12% for the nine months ended September 30,
1998 compared to 51.88% for the same period in 1997.
The following schedule presents noninterest income and expense as a
percentage of average assets, excluding non-recurring items, for the
nine months ended September 30, 1998 and 1997.
1998 1997
Noninterest income 1.53 % 1.30 (1)
Personnel expense 1.73 1.66
Occupancy and equipment expense .41 .41
Other operating expense 1.02 .91 (1)
Noninterest expense 3.16 2.98
Net overhead 1.63 % 1.68
_______________________________
(1) Excludes the $2.3 million gain on the sale of a subsidiary
and merger-related expense of $17.3 million in 1997.
The effective income tax rate was 35.7% in 1998 compared to 37.4% in
the same period of 1997. Non-deductible merger-related expense
resulted in the higher effective tax rate experienced in the first
nine months of 1997.
Financial Condition
Total assets have increased $380.7 million since September 30, 1997
due solely to internal growth. The majority of the increase occurred
in interest-earning assets. Average assets have increased from $6.9
billion for the nine months ended September 30, 1997 to $7.3 billion
for the nine months ended September 30, 1998.
At September 30, 1998, 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
$21.8 million or .41% of outstanding loans and lease financing and
foreclosed real estate. This compares to $21.3 million or .43% at
September 30, 1997. The reserve for loan and lease losses to risk
assets was 3.28x at September 30, 1998 compared to 3.20x at December
31, 1997 and 3.13x at September 30, 1997.
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 9.28% and 9.14% for the nine months ended
September 30, 1998 and 1997, respectively. Under a previously
announced stock repurchase plan, the Corporation has repurchased and
retired 1,120,400 shares of its common stock during the period March
2, 1998 through September 30, 1998. The average cost of the shares
repurchased was $55.33 per share for a total cost of $62.0 million.
Book value per share increased from $15.94 at September 30, 1997 to
$16.91 at September 30, 1998, a 6.1% increase.
The unrealized gains on investment securities available for sale, net
of applicable taxes, increased $4.9 million from December 31, 1997 to
result in an after-tax unrealized gain at September 30, 1998 of $18.8
million. As of September 30, 1998, unrealized gains on investment
securities available for sale, net of applicable taxes, added $.46 per
share to book value.
On October 20, 1998, the Corporation's Board of Directors, as part of
a continuing program, authorized stock repurchases of up to 1,000,000
shares, plus additional repurchases needed to retire any shares issued
for the exercise of stock options, restricted stock awards, or other
corporate purposes. Purchases can begin immediately and the
authorization will expire in October 1999. The Board of Directors
also declared a quarterly cash dividend on common stock of $.26. The
dividend is payable January 4, 1999, to shareholders of record as of
December 15, 1998. The Corporation has increased its annual cash
dividend for 34 consecutive years.
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 Subsidiary Banks continue to maintain higher
capital ratios than required under regulatory guidelines at September
30, 1998 as indicated below:
September 30, Regulatory
Ratio 1998 1997 Minimums
Tier 1 Capital 4.00%
Corporation 11.45% 11.96
CCB 10.82 11.95
AmFed 14.86 12.42
CCB-Ga. 18.11 11.91
Total Capital 8.00
Corporation 13.30 13.85
CCB 12.01 13.16
AmFed 16.17 13.67
CCB-Ga. 19.40 13.20
Leverage 4.00
Corporation 8.74 8.88
CCB 8.27 8.95
AmFed 10.43 8.51
CCB-Ga. 13.51 10.15
<PAGE>
Year 2000 Issue
The Corporation is in the midst of its project to assess and
correct the impact of the "Year 2000 Issue". The Year 2000
Issue resulted from many computer programs having been written
using two digit dates rather than four to define the applicable
year. Historically, the first two digits were eliminated to save
memory. Since in such systems there is no accommodation for the
full four-digit year, a serious problem may occur when "00" is
used to identify the Year 2000. For these systems, it is not
only impossible to distinguish 2000 from 1900 but it also becomes
difficult to calculate the passage of time between preceding
years and the Year 2000. This error could result in system
failure or miscalculations causing disruption of operations,
including, among other things, an inability to process customer
transactions, properly accrue interest income and expense or
engage in normal business activities. In addition, non-banking
systems such as security alarms, elevators, telephones, etc. are
subject to a Year 2000 malfunction due to their dependence upon
computers for proper operation. As described, the Year 2000
Issue presents a number of challenges to financial institutions'
management; correction of Year 2000 Issues will be costly and
complex for the entire industry.
The Corporation began discussing the Year 2000 Issue more than
two years ago and adopted a Year 2000 Strategic Project Plan to
address the issue. The Corporation's Year 2000 plan follows
guidelines outlined by the Federal Financial Institutions
Examination Council ("FFIEC"). The FFIEC requires all banks to
develop plans with five critical phases: awareness, assessment,
renovation, validation and implementation. The awareness phase
defined the Year 2000 Issue and the potential challenges
associated with the date change. The assessment phase consisted
of an evaluation of the size and complexity of ensuring that the
Corporation will be ready for the Year 2000. During the
assessment phase, the Corporation determined that it would be
required to modify a significant portion of its software and
replace certain software and hardware so that its computer
systems will properly utilize dates beyond December 31, 1999.
During the renovation phase, system upgrades will be implemented
and applicable hardware will be replaced. The validation phase
involves testing all computer systems. Even if software has been
tested by the vendor and certified Year 2000-ready, the
Corporation's Year 2000 project team will re-test and validate
all software to ensure compatibility with the Corporation's
information systems environment. The implementation phase is the
final step which involves incorporating Year 2000-ready systems
into the day-to-day operations of the Corporation.
The renovation of all major software applications was completed in
early September 1998. The Corporation is currently testing its
software in a Year 2000 environment to determine if any applications
need additional modifications; this testing is scheduled to be
completed by early January 1999. A new Year 2000-ready mainframe
computer will be put into production during mid-January 1999. Any
problems identified in the initial Year 2000 testing will be addressed
and corrected during the remainder of 1999. Substantially all testing
and replacement of mission critical personal computers is scheduled to
be completed by the end of 1998. In addition, the project team has
evaluated the aforementioned non-banking systems susceptible to Year
2000 problems and started converting or replacing the computer-related
components to make them Year 2000-ready.
In addition to ensuring the proper operation of its systems, the
Corporation is also monitoring the remediation efforts of third-
party entities whose own Year 2000 disruptions would impact the
Corporation's operations. The estimated costs to assess the
impact of third parties' remediation efforts are included in the
Corporation's total Year 2000 project costs and estimates. The
project team identified the vendors whose operations were deemed
mission critical to the Corporation's operations and the project
team has contacted these vendors regarding their progress in
correcting their Year 2000 Issues. In addition, the Corporation
has initiated communication with its major customers to determine
the extent of their Year 2000 preparedness. As most corporate
customers depend on computer systems for normal operations, a
disruption in their business could result in potentially
significant financial difficulties. In the loan and deposit
areas, major customers of $1 million or more have been
identified. As of September 30, 1998, the Corporation had
contacted in excess of 95% of major customers and appropriately
documented the communications as to risk to the Corporation.
Finally, financial institutions such as the Subsidiary Banks
exchange large volumes of date-sensitive data electronically
between other financial institutions, clearing houses, customers
and regulatory agencies. The Corporation will test and verify,
as appropriate, these data exchanges. Based on these reviews of
critical vendors, major customers and other major counter-
parties, at present the Corporation feels that there is not an
inordinate amount of risk which would require the establishment
of any special reserves for the Year 2000 Issue. The Corporation
will continue to monitor and test the remediation efforts of
these third parties and determine if it needs to modify its own
operations due to their failure to remediate their Year 2000
Issue. However, there can be no guarantee that the systems of
other companies on which the Corporation's systems rely will be
timely converted, or that a failure to convert by another
company, or a conversion that is incompatible with the
Corporation's systems, will not have an adverse effect on the
Corporation.
The Corporation has a contingency plan that outlines emergency
response procedures that meet regulatory guidelines. The goal of the
contingency plan is to facilitate the resumption of business in the
event there is a disruption of critical systems necessary to operate.
Contingency plans include alternative power sources, off-site
processing, etc. While the Corporation's project team is monitoring
the progress of the Year 2000 plan, consulting firms are also being
used to keep track of the readiness program. A Year 2000 consulting
services group is overseeing the Year 2000 Project Management Office
on an on-going basis. As the Corporation and its Subsidiary Banks are
regulated by federal and state banking regulatory agencies, they are
required to comply with those agencies' Year 2000 modification
schedules. Federal regulatory agencies periodically review the
Corporation's Year 2000 conversion efforts and have had no adverse
criticism on the progress-to-date or its anticipated schedule to
complete the Year 2000 project. Management believes that it will meet
the regulators' timeframe for Year 2000 compliance. In addition, the
Corporation retained the services of an independent consulting firm to
review its Year 2000 readiness plans. In the consultants' report,
there were no problems noted in the areas of awareness, project
management, remediation, risk management and communications.
The total cost of the Year 2000 project is currently estimated at $4.8
million, of which $2.2 million is attributable to the purchase of new
software and hardware which will be capitalized. The remainder of the
cost will be expensed as incurred over the next two years and is not
expected to have a material effect on the Corporation's results of
operations. During the first nine months of 1998, the Corporation
incurred $1.5 million of non-capitalizable expense attributable to the
Year 2000 project. Total non-capitalizable expense incurred prior to
1998 was less than $75,000.
The costs of the Year 2000 project and the date on which the
Corporation plans to complete the Year 2000 modifications are
based on management's best estimates, which were derived
utilizing numerous assumptions of future events including the
continued availability of certain resources, third-party
modification plans and other factors. However, there can be no
guarantee that these estimates will be achieved at the cost
disclosed or within the timeframe anticipated.
The Corporation presently believes that with its identified
modifications to existing software and conversions to new software and
hardware and the successful completion of third-party remediation
efforts, the Year 2000 Issue can be mitigated. However, if the
Corporation's modifications and conversions are not made, or are not
completed on a timely basis or if mission critical third-parties do
not remediate their own Year 2000 Issues, disruptions in operations
could occur and could have a material adverse impact on the financial
position of the Corporation.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk reflects the risk of economic loss resulting from adverse
changes in market price and interest rates. This risk of loss can be
reflected in diminished current market values and/or reduced potential
net interest income in future periods.
The Corporation's market risk arises primarily from interest rate risk
inherent in its lending and deposit-taking activities. The structure
of the Corporation's loan and deposit portfolios is such that a
significant decline in interest rates may adversely impact net market
values and net interest income. The Corporation does not maintain a
trading account nor is the Corporation subject to currency exchange
risk or commodity price risk. Responsibility for monitoring interest
rate risk rests with the Asset/Liability Management Committee ("ALCO")
which is comprised of senior management. ALCO regularly reviews the
Corporation's interest rate risk position and adopts balance sheet
strategies that are intended to optimize net interest income while
maintaining market risk within a set of Board-approved guidelines.
As of September 30, 1998, Management believes that there have been no
significant changes in market risk as disclosed in the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1997.
Management believes that it has accomplished its objective to avoid
material negative changes in net income resulting from changes in
interest rates.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
Exhibit 27.1 Financial Data Schedule as of September 30, 1998.
(b). Reports on Form 8-K
No reports on Form 8-K were filed in the third quarter.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CCB FINANCIAL CORPORATION
Registrant
Date: November 13, 1998 /s/ ERNEST C. ROESSLER
Ernest C. Roessler
Chairman, President and
Chief Executive Officer
Date: November 13, 1998 /s/ SHELDON M. FOX
Sheldon M. Fox
Senior Vice President and
Chief Financial Officer
Date: November 13, 1998 /s/ W. HAROLD PARKER, JR.
W. Harold Parker, Jr.
Senior Vice President and
Controller
(Chief Accounting Officer)
<PAGE>
<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, 1998 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-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 256,065
<INT-BEARING-DEPOSITS> 53,073
<FED-FUNDS-SOLD> 222,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,283,103
<INVESTMENTS-CARRYING> 80,334
<INVESTMENTS-MARKET> 85,955
<LOANS> 5,360,547
<ALLOWANCE> 71,543
<TOTAL-ASSETS> 7,407,269
<DEPOSITS> 6,216,989
<SHORT-TERM> 235,759
<LIABILITIES-OTHER> 91,672
<LONG-TERM> 176,220
0
0
<COMMON> 202,994
<OTHER-SE> 483,635
<TOTAL-LIABILITIES-AND-EQUITY> 7,407,269
<INTEREST-LOAN> 351,610
<INTEREST-INVEST> 67,373
<INTEREST-OTHER> 12,899
<INTEREST-TOTAL> 431,882
<INTEREST-DEPOSIT> 175,384
<INTEREST-EXPENSE> 191,806
<INTEREST-INCOME-NET> 240,076
<LOAN-LOSSES> 11,564
<SECURITIES-GAINS> 1,389
<EXPENSE-OTHER> 171,904
<INCOME-PRETAX> 139,441
<INCOME-PRE-EXTRAORDINARY> 89,623
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,623
<EPS-PRIMARY> 2.18
<EPS-DILUTED> 2.16
<YIELD-ACTUAL> 4.77
<LOANS-NON> 16,936
<LOANS-PAST> 2,987
<LOANS-TROUBLED> 756
<LOANS-PROBLEM> 6,754
<ALLOWANCE-OPEN> 67,594
<CHARGE-OFFS> 9,496
<RECOVERIES> 1,881
<ALLOWANCE-CLOSE> 71,543
<ALLOWANCE-DOMESTIC> 71,543
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 8,600
</TABLE>
