SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): July 7, 1997
- --------------------------------------------------------------------------------
CENTURA BANKS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
<TABLE>
<CAPTION>
North Carolina 1-10646 56-1688522
- --------------------------------------------------------------------------------
<S> <C> <C>
(State of Incorporation)(Commission File Number)(IRS Employer Identification No.)
</TABLE>
134 North Church Street, Rocky Mount, North Carolina 27804
- --------------------------------------------------------------------------------
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (919) 977-4400
- --------------------------------------------------------------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Exhibit Index on Page 4.
<PAGE>
Item 5. Other Events:
On July 7, 1997, Centura Banks, Inc. ("Centura") announced earnings for the
three months ended June 30, 1997. Centura's net income increased to $20.0
million compared to $17.3 million for the same period of 1996. Fully diluted
earnings per share increased to $.76 compared to $.67 in the second quarter of
1996. A press release is attached as Exhibit 99.
Item 7. Financial statements and Exhibits.
The exhibit listed in the Exhibit Index is filed herewith as part of this
Current Report on Form 8-K.
<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.
CENTURA BANKS, INC.
Registrant
Date: July 7, 1997 By: /s/Steven Goldstein
Steven Goldstein
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Sequential
Page
Exhibit Description of Exhibit Number
- --------------------------------------------------------------------------------
99 Press release dated July 7, 1997 5
<PAGE>
For Immediate Release
July 7, 1997
For More Information Contact: Steven Goldstein
Chief Financial Officer
(919) 977-8356
[email protected]
CENTURA BANKS INC. REPORTS SECOND QUARTER EARNINGS
ROCKY MOUNT, N.C. -- Centura Banks Inc. (NYSE:CBC) announced today
that net income for the second quarter of 1997 increased 16 percent to $20.0
million compared to $17.3 million for the same quarter last year. Fully diluted
earnings per share increased to $0.76 in the second quarter of 1997 from $0.67
in the comparable quarter of 1996.
For the first half of 1997, net income increased 9 percent to $37.9
million, or $1.44 per fully diluted share from $1.34 during the same period last
year.
Centura gained momentum in the second quarter, increasing earnings by
12 percent over the first quarter of 1997. The improvement was led by growth in
noninterest revenue, principally in brokerage, insurance and deposit fees, as
well as income from other earning assets. The efficiency ratio of 62.32 percent
for the second quarter of 1997 has continued to improve as a result of stable
noninterest expense levels, coupled with revenue growth.
"The positive results of the second quarter underscore our core
commitment to improved operating efficiency and revenue growth," commented Cecil
W. Sewell, Centura's chairman and chief executive officer. "We are realizing the
benefits from investments in technology, which are enabling us to increase
income while holding expenses relatively constant. Centura is well-positioned
for an excellent second half of 1997 as we continue to leverage the investments
of the last several years."
For the quarter, return on assets was 1.24 percent and return on equity
was 16.00 percent. Deposits and loans increased significantly over the previous
quarter and over the
CENTURA REPORTS SECOND QUARTER EARNINGS
JULY 7, 1997
PAGE TWO
comparable quarter in 1996. Deposits increased by 2 percent to $4.8 billion and
loans increased 3 percent to $4.2 billion at June 30, 1997, compared to first
quarter of 1997, while deposits and loans increased 9 percent and 5 percent
respectively over June 30, 1996. Net charge-offs were 0.26 percent of average
total loans for the quarter.
During the quarter, Centura announced its proposed acquisition of 13
offices from UCB/BB&T, expected to be completed during the third quarter. Also,
in June Centura completed its offering of $100 million of trust preferred
securities. In addition, the board of directors has authorized the repurchase of
up to 200,000 shares of common stock in the open market, related to the
anticipated exercise of stock options over the next twelve months.
With assets of $6.7 billion, Centura continues to focus on utilization
of technology and alternative delivery channels to effectively provide its
diverse line of financial services to individuals and businesses throughout
North Carolina and Virginia.
More information about Centura is available on its web site at www.centura.com.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30 June 30 June 30 June 30
(In thousands, except share and per share data) 1997 1996 Change 1997 1996 Change
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS
Interest income $ 126,266 $ 114,366 10.4% $ 246,109 $ 227,670 8.1%
Interest expense 60,800 53,188 14.3 116,758 107,464 8.6
-----------------------------------------------------------------------------------------------------------------------
Net interest income 65,466 61,178 7.0 129,351 120,206 7.6
Provision for loan losses 3,189 2,385 33.7 6,083 4,450 36.7
Noninterest income 27,196 23,833 14.1 53,181 48,412 9.9
Noninterest expense 58,996 55,086 7.1 118,028 108,548 8.7
Income taxes 10,497 10,281 2.1 20,567 20,720 (0.7)
-----------------------------------------------------------------------------------------------------------------------
Net income $ 19,980 $ 17,259 15.8% $ 37,854 $ 34,900 8.5%
=======================================================================================================================
Net interest income, taxable equivalent $ 67,470 $ 62,630 7.7% $ 133,047 $ 123,180 8.0%
=======================================================================================================================
PER COMMON SHARE
Net income-primary $ 0.76 0.67 13.4% $ 1.44 1.34 7.5%
Net income-fully diluted 0.76 0.67 13.4 1.44 1.34 7.5
Cash dividends paid 0.27 0.25 8.0 0.52 0.50 4.0
Book value 19.46 17.27 12.7 19.46 17.27 12.7
Closing market price 45.875 36.750 24.8 45.875 36.750 24.8
FINANCIAL RATIOS
Return on average assets 1.24% 1.19% 5 bp 1.21% 1.21% 0 bp
Return on average shareholders' equity 16.00 15.84 16 15.43 15.86 (43)
Equity to assets (average) 7.76 7.50 26 7.83 7.63 20
AVERAGE BALANCES
Assets $ 6,453,981 $ 5,848,330 10.4% $ 6,320,093 $ 5,799,882 9.0%
Earning assets 5,926,035 5,384,075 10.1 5,810,053 5,344,720 8.7
Loans 4,188,811 3,954,978 5.9 4,148,198 3,887,501 6.7
Investment securities 1,710,960 1,395,395 22.6 1,632,254 1,422,801 14.7
Noninterest-bearing deposits 684,472 631,045 8.5 671,295 616,886 8.8
Core deposits 4,364,613 3,942,569 10.7 4,337,694 3,909,605 10.9
Total deposits 4,725,511 4,348,934 8.7 4,691,646 4,351,399 7.8
Interest-bearing liabilities 5,185,562 4,692,359 10.5 5,071,187 4,651,482 9.0
Shareholders' equity 501,027 438,358 14.3 494,852 442,594 11.8
PERIOD END BALANCES
Assets $ 6,669,028 $ 5,928,686 12.5% $ 6,669,028 $ 5,928,686 12.5%
Earning assets 6,092,168 5,411,989 12.6 6,092,168 5,411,989 12.6
Loans 4,243,868 4,033,351 5.2 4,243,868 4,033,351 5.2
Investment securities 1,806,095 1,339,484 34.8 1,806,095 1,339,484 34.8
Noninterest-bearing deposits 764,390 665,248 14.9 764,390 665,248 14.9
Core deposits 4,460,541 4,047,847 10.2 4,460,541 4,047,847 10.2
Total deposits 4,821,036 4,434,203 8.7 4,821,036 4,434,203 8.7
Shareholders' equity 502,049 434,710 15.5 502,049 434,710 15.5
- ---------------------------------------------------------------------------------------------------------------------------
bp Change is measured as difference in basis points.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30 June 30 June 30 June 30
---------- ---------- -------- --------
(In thousands, except share data) 1997 1996 Change 1997 1996 Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHARES OUTSTANDING
Average primary 26,295,247 25,834,383 1.8% 26,291,582 26,009,085 1.1%
Average fully diluted 26,312,682 25,840,273 1.8 26,302,392 26,014,975 1.1
Outstanding 25,804,633 25,170,978 2.5 25,804,633 25,170,978 2.5
COMPOSITION RATIOS*
Earning assets to assets 91.82% 92.06% (24)bp 91.93% 92.15% (22)bp
Loans to earning assets 70.68 73.46 (278) 71.40 72.74 (134)
Interest-bearing liabilities to earning assets 87.50 87.15 35 87.28 87.03 25
Loans to total deposits 88.64 90.94 (230) 88.42 89.34 (92)
Noninterest-bearing deposits to total deposits 14.48 14.51 (3) 14.31 14.18 13
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 58,762 $ 56,483 4.0% $ 58,715 $ 55,070 6.6%
Provision for loan losses 3,189 2,385 33.7 6,083 4,450 36.7
Charge-offs (3,639) (2,148) 69.4 (7,256) (3,460) 109.7
Recoveries 894 1,291 (30.8) 1,664 1,951 (14.7)
------------------------------------------------------------------------------------------------------------------------------
Net charge-offs (2,745) (857) 220.3 (5,592) (1,509) 270.6
------------------------------------------------------------------------------------------------------------------------------
Ending balance $ 59,206 $ 58,011 2.1% $ 59,206 $ 58,011 2.1%
==============================================================================================================================
Net charge-offs to average loans 0.26% 0.09% 17 bp 0.27% 0.08% 19 bp
==============================================================================================================================
COMPOSITION OF RISK ASSETS
Nonaccrual loans $ 24,001 $ 18,845 27.4%
Restructured loans - 828 (100.0)
------------------------------------------------------------------------------------------------------------------------------
Nonperforming loans 24,001 19,673 22.0
------------------------------------------------------------------------------------------------------------------------------
Foreclosed property 3,739 2,793 33.9
------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets $ 27,740 $ 22,466 23.5%
==============================================================================================================================
ASSET QUALITY RATIOS**
Nonperforming assets to:
Loans and foreclosed property 0.65% 0.56% 9 bp
Total assets 0.42 0.38 4
Nonperforming loans to total loans 0.57 0.49 8
Allowance for loan losses to total loans 1.40 1.44 (4)
Allowance for loan losses to nonperforming loans 2.47x 2.95x (48)
- ------------------------------------------------------------------------------------------------------------------------------------
bp Change is measured as difference in basis points.
*Balance sheet amounts used in calculations are based on average balances.
**Balance sheet amounts used in calculations are based on period end balances.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARY
Three Months Ended June 30 Six Months Ended June 30
- ------------------------------------------------------------------------------------------ ----------------------------------------
As a Percent of As a Percent of
Average Assets# Average Assets
--------------- ----------------
(Dollars in thousands) 1997 1996 Change 1997 1996 1997 1996 Change 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NONINTEREST INCOME
Service charges on deposit accounts $ 9,632 $ 8,697 10.8% 0.60% 0.60% $ 18,844 $ 16,739 12.6% 0.60% 0.58%
Credit card and related fees 1,476 1,043 41.5 0.09 0.07 2,770 2,109 31.3 0.09 0.07
Insurance & brokerage commissions 3,537 2,913 21.4 0.22 0.20 6,781 5,447 24.5 0.22 0.19
Other service charges, commissions and fees 1,862 1,357 37.2 0.12 0.09 3,561 2,369 50.3 0.11 0.08
Fees for trust services 1,950 1,645 18.5 0.12 0.11 3,900 3,291 18.5 0.12 0.11
Mortgage income 2,794 2,824 (1.1) 0.17 0.19 5,467 6,187 (11.6) 0.17 0.21
Negative goodwill amortization 335 335 0.0 0.02 0.02 669 669 0.0 0.02 0.02
Operating lease fees 2,736 3,399 (19.5) 0.17 0.24 5,773 6,500 (11.2) 0.18 0.24
Other noninterest income 2,906 944 207.8 0.18 0.07 5,542 3,822 45.0 0.19 0.14
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest income, excluding securities
transactions 27,228 23,157 17.6 1.69 1.59 53,307 47,133 13.1 1.70 1.64
Securities gains (losses), net (32) 676 (104.7) 0.00 0.05 (126) 1,279 (109.9) 0.00 0.04
- ------------------------------------------------------------------------------------------------------------------------------------
Total noninterest income $ 27,196 $ 23,833 14.1% 1.69% 1.64% $ 53,181 $ 48,412 9.9% 1.70% 1.68%
====================================================================================================================================
NONINTEREST EXPENSE
Salaries and overtime $ 22,017 $ 21,476 2.5% 1.37% 1.48% $ 43,593 $ 42,525 2.5% 1.39% 1.47%
Fringe benefits and other personnel costs 5,139 5,288 (2.8) 0.32 0.36 11,320 10,703 5.8 0.36 0.37
Occupancy 3,443 3,095 11.2 0.21 0.21 6,781 6,188 9.6 0.22 0.21
Equipment 5,300 4,880 8.6 0.33 0.34 10,465 9,288 12.7 0.33 0.32
Foreclosed real estate losses and related
operating expense 398 171 132.8 0.02 0.01 722 309 133.7 0.02 0.01
Marketing 2,123 1,425 49.0 0.13 0.10 4,146 3,126 32.6 0.13 0.11
Professional fees 5,600 2,969 88.6 0.35 0.20 10,226 5,809 76.0 0.33 0.20
Other administrative 1,976 2,029 (2.6) 0.12 0.14 4,017 4,007 0.3 0.13 0.14
FDIC insurance 323 841 (61.6) 0.02 0.06 639 1,803 (64.6) 0.02 0.06
Deposit intangible and goodwill amortization 1,418 1,176 20.6 0.09 0.08 2,836 2,410 17.7 0.09 0.08
Office supplies, postage and telephone 4,065 4,036 0.7 0.25 0.28 8,571 7,908 8.4 0.27 0.27
Depreciation on leased equipment 1,889 2,360 (20.0) 0.12 0.16 3,807 4,385 (13.2) 0.12 0.16
Other operating 5,305 5,340 (0.7) 0.34 0.37 10,905 10,087 8.1 0.36 0.36
- ------------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense $ 58,996 $ 55,086 7.1% 3.67% 3.79% $118,028 $108,548 8.7% 3.77% 3.76%
====================================================================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin + 34.31% 33.53% 78 bp 33.36% 34.15% (79)bp
Efficiency ratio*** 62.32% 63.71% (139)bp 63.38% 63.26% 12 bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.41% 9.31% 10 bp 9.36% 9.39% (3)bp
Taxable securities 6.67 6.43 24 6.62 6.41 21
Tax-exempt securities 8.91 8.88 3 8.86 8.81 5
Short-term investments 5.56 4.68 88 5.47 4.95 52
- ------------------------------------------------------------------------------------------------------------------------------------
Interest-earning assets 8.62 8.55 7 8.59 8.59 0
- -------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 4.43 4.29 14 4.40 4.41 (1)
Borrowed funds 5.21 5.19 2 5.09 5.21 (12)
Long-term debt 6.51 6.25 26 6.36 6.35 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 4.69 4.56 13 4.63 4.65 (2)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest rate spread 3.93 3.99 (6) 3.96 3.94 2
Net interest margin 4.52 4.58 (6) 4.55 4.55 0
====================================================================================================================================
bp Change is measured as difference in basis points.
*** Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income.
+ Sum of income before taxes plus the taxable equivalent adjustment divided by the sum of taxable equivalent
net interest income plus noninterest income.
# Data presented is annualized.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARY
1997 1996 2nd Qtr 97
----------------------- ----------------------------------- -----------
Second First Fourth Third Second vs.
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter 1st Qtr 97
- ------------------------------------------------------------------------ ----------------------------------- -----------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SUMMARY *
Assets $ 6,453,981 $ 6,184,718 $ 6,197,670 $ 6,024,327 $ 5,848,330 4.4%
Earning assets 5,926,035 5,692,783 5,703,321 5,544,087 5,384,075 4.1
Loans 4,188,811 4,107,133 4,181,963 4,097,846 3,954,978 2.0
Investment securities 1,710,960 1,552,675 1,491,008 1,407,955 1,395,395 10.2
Total deposits 4,725,511 4,657,405 4,723,099 4,592,544 4,348,934 1.5
Interest-bearing liabilities 5,185,562 4,955,541 4,944,155 4,813,779 4,692,359 4.6
Stockholders' equity 501,027 488,609 472,484 457,072 438,358 2.5
Total market capitalization (period end) 1,183,788 1,004,335 1,145,458 1,002,912 925,033 17.9
Net income 19,980 17,874 18,535 14,716 17,259 11.8
PROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating profit margin + 34.31% 32.37% 32.02% 26.96% 33.53% 194 bp
Efficiency ratio *** 62.32 64.47 65.09 70.38 63.71 (215)
Net interest margin # 4.52 4.58 4.66 4.61 4.58 (6)
Return on average assets # 1.24 1.17 1.19 0.97 1.19 7
Return on average equity # 16.00 14.84 15.61 12.81 15.84 116
Equity to assets (average) 7.76 7.90 7.62 7.59 7.50 (14)
PER SHARE SUMMARY
Earnings per share - primary $ 0.76 $ 0.68 $ 0.70 $ 0.57 $ 0.67 11.8%
Earnings per share - fully diluted 0.76 0.68 0.70 0.57 0.67 11.8
Cash dividends paid 0.27 0.25 0.25 0.25 0.25 8.0
Book value per share 19.46 19.08 18.51 18.04 17.27 2.0
Closing market price 45.875 39.000 44.625 38.625 36.750 17.6
KEY INTANGIBLE ASSETS **
Goodwill $ 61,833 $ 63,122 $ 64,411 $ 66,348 $ 50,599 (2.0)%
Deposit base premium 2,143 2,272 2,401 2,742 2,896 (5.7)
Mortgage servicing rights 23,028 21,481 21,046 19,712 17,114 7.2
ASSET QUALITY SUMMARY **
Nonperforming assets $ 27,740 $ 26,768 $ 22,873 $ 20,398 $ 22,466 3.6%
Allowance for loan losses 59,206 58,762 58,715 60,329 58,011 0.8
Nonperforming assets to total assets 0.42% 0.42% 0.36% 0.33% 0.38% 0 bp
Allowance for loan losses to loans 1.40 1.42 1.43 1.43 1.44 (2)
Net charge-offs to average loans # 0.26 0.28 0.41 0.13 0.09 (2)
====================================================================================================================================
bp Change is measured as difference in basis points.
* Balance sheet amounts are based on average balances unless otherwise noted.
** Balance sheet amounts are based on period end balances unless otherwise noted.
*** Noninterest expense divided by sum of noninterest income plus net interest income, taxable equivalent basis.
+ Sum of income before taxes plus the taxable equivalent adjustment divided by the sum of taxable equivalent
net interest income plus noninterest income.
# Data presented is annualized.
# Data presented is annualized.
</TABLE>
