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): April 3, 1997
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CENTURA BANKS, INC.
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(Exact name of registrant as specified in charter)
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North Carolina 1-10646 56-1688522
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<S> <C> <C>
(State of Incorporation)(Commission File Number)(IRS Employer Identification No.)
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134 North Church Street, Rocky Mount, North Carolina 27804
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(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (919) 977-4400
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N/A
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(Former name or former address, if changed since last report)
Exhibit Index on Page 4.
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Item 5. Other Events:
On April 3, 1997, Centura Banks, Inc. ("Centura") announced earnings for the
three months ended March 31, 1997. Centura's net income increased to $17.9
million compared to $17.6 million for the same period of 1996. Fully diluted
earnings per share increased to $.68 compared to $.67 in the first 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.
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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: April 3, 1997 By: /s/Steven Goldstein
Steven Goldstein
Chief Financial Officer
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EXHIBIT INDEX
Sequential
Page
Exhibit Description of Exhibit Number
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99 Press release dated April 3, 1997 5
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For Immediate Release
April 3, 1997
For More Information, Contact: Steven Goldstein
Chief Financial Officer
(919) 977-8356
[email protected]
CENTURA BANKS INC. REPORTS HIGHER FIRST QUARTER EARNINGS
ROCKY MOUNT, N.C. -- Centura Banks Inc. (NYSE:CBC) announced today that
net income for the first quarter of 1997 increased to $17.9 million compared to
$17.6 million for the same period one year ago. Fully diluted earnings per share
increased to 68 cents from 67 cents in the first quarter of 1996.
The increase results from continued growth in noninterest income, which
rose 5.7 percent from the first quarter of 1996 to $26.0 million. Sources
included in noninterest income performance include brokerage and insurance
commissions, service charges on deposit accounts, and income from mortgage
activities and operating leases.
"Our performance during the first quarter is in line with our plan as
we continue to focus on improving operating efficiency and revenue growth," said
Cecil W. Sewell, Centura's chairman and chief executive officer. "We are
particularly pleased with the results of the current quarter, which reflect the
investments associated with the recent
-more-
CENTURA REPORTS FIRST QUARTER EARNINGS INCREASE
PAGE TWO
APRIL 3, 1997
opening of 21 in-store facilities. Our in-store initiative, led through a
strategic alliance with Hannaford, entails opening financial centers in more
than 30 stores by the end of 1998, 24 of which will open by the end of 1997.
Although the pace requires a significant front-end investment, a unique
opportunity to co-brand with a top quality company such as Hannaford in key
markets presents a compelling, time-sensitive business case. We are also pleased
with the continuing positive results from our online banking and checking
account restructuring initiatives."
For the quarter, return on assets was 1.17 percent and return on equity
was 14.84 percent. Deposits increased 9.6 percent to $4.7 billion over
the comparable quarter end of 1996, while loans increased 6.4 percent to
$4.1 billion. Net charge-offs were 0.28 percent of average total loans compared
with charge-offs of 0.41 percent in the fourth quarter of 1996. Centura's
net interest margin also showed improvement over the comparable quarter,
rising to 4.58 percent for the quarter.
With assets of $6.4 billion, Centura provides a complete line of
banking, investment, insurance and trust services to individuals and businesses
throughout North Carolina. It provides services through 168 financial stores,
including 15 in supermarkets; more than 265 ATMs at financial centers, Wal-Mart
and Sam's stores; the Centura Highway telephone banking center; Quicken,
QuickBooks, Microsoft Money software and America Online.
###
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FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months
Ended Ended
March 31 March 31
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(In thousands, except share and per share data) 1997 1996 Change
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EARNINGS
Interest income $ 119,843 $ 113,304 5.8%
Interest expense 55,958 54,276 3.1
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Net interest income 63,885 59,028 8.2
Provision for loan losses 2,894 2,065 40.1
Noninterest income 25,985 24,579 5.7
Noninterest expense 59,033 53,462 10.4
Income taxes 10,069 10,439 (3.5)
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Net income $ 17,874 $ 17,641 1.3%
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Net interest income, taxable equivalent $ 65,577 $ 60,550 8.3%
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PER COMMON SHARE
Net income-primary $ 0.68 $ 0.67 1.5%
Net income-fully diluted 0.68 0.67 1.5
Cash dividends paid 0.25 0.25 --
Book value 19.08 17.43 9.5
Closing market price 39.00 36.75 6.1
FINANCIAL RATIOS
Return on average assets 1.17% 1.23% (6)bp
Return on average shareholders' equity 14.84 15.88 (104)
Equity to assets (average) 7.90 7.77 13
AVERAGE BALANCES
Assets $ 6,184,718 $ 5,751,434 7.5%
Earning assets 5,692,783 5,305,364 7.3
Loans 4,107,133 3,820,022 7.5
Investment securities 1,552,675 1,450,207 7.1
Noninterest-bearing deposits 657,971 602,728 9.2
Core deposits 4,310,475 3,876,641 11.2
Total deposits 4,657,405 4,353,866 7.0
Interest-bearing liabilities 4,955,541 4,610,606 7.5
Shareholders' equity 488,609 446,830 9.4
PERIOD END BALANCES
Assets $ 6,376,713 $ 5,840,345 9.2%
Earning assets 5,815,468 5,367,525 8.3
Loans 4,130,233 3,882,272 6.4
Investment securities 1,663,427 1,455,907 14.3
Noninterest-bearing deposits 711,467 622,134 14.4
Core deposits 4,407,852 3,895,126 13.2
Total deposits 4,748,245 4,330,669 9.6
Shareholders' equity 491,367 445,332 10.3
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bp Change is measured as difference in basis points.
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OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months
Ended Ended
March 31 March 31
(In thousands, except share data) 1997 1996 Change
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SHARES OUTSTANDING
Average primary 26,287,712 26,177,097 0.4%
Average fully diluted 26,287,712 26,191,058 0.4
Outstanding 25,752,174 25,543,090 0.8
COMPOSITION RATIOS*
Earning assets to assets 92.05% 92.24% (19)bp
Loans to earning assets 72.15 72.00 15
Interest-bearing liabilities to earning assets 87.05 86.90 15
Loans to total deposits 88.19 87.74 45
Noninterest-bearing deposits to total deposits 14.13 13.84 29
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 58,715 $ 55,070 6.6%
Provision for loan losses 2,894 2,065 40.1
Charge-offs (3,617) (1,312) 175.7
Recoveries 770 660 16.7
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Net charge-offs (2,847) (652) 336.7
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Ending balance $ 58,762 $ 56,483 4.0%
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Net charge-offs to average loans 0.28% 0.07% 21 bp
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COMPOSITION OF RISK ASSETS
Nonaccrual loans $ 22,767 $ 17,440 30.5%
Restructured loans -- 1,031 (100.0)
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Nonperforming loans 22,767 18,471 23.3
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Foreclosed property 4,001 2,633 52.0
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Nonperforming assets $ 26,768 $ 21,104 26.8%
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ASSET QUALITY RATIOS**
Nonperforming assets to:
Loans and foreclosed property 0.65% 0.54% 11 bp
Total assets 0.42 0.36 6
Nonperforming loans to total loans 0.55 0.48 7
Allowance for loan losses to total loans 1.42 1.45 (3)
Allowance for loan losses to nonperforming loans 2.58x 3.06x (47)
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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.
#Date presented is annualized.
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OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months
Ended Ended As a Percent of
March 31 March 31 Average Assets#
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(Dollars in thousands) 1997 1996 Change 1997 1996
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NONINTEREST INCOME
Service charges on deposit accounts $ 9,212 $ 8,042 14.6% 0.60% 0.56%
Credit card and related fees 1,294 1,066 21.4 0.08 0.07
Insurance & brokerage commissions 3,244 2,534 28.0 0.21 0.18
Other service charges, commissions and fees 1,699 1,012 67.9 0.11 0.07
Fees for trust services 1,950 1,646 18.5 0.13 0.12
Mortgage income 2,673 3,363 (20.5) 0.18 0.24
Negative goodwill amortization 334 334 -- 0.02 0.02
Operating lease fees 3,037 3,101 (2.1) 0.20 0.22
Other noninterest income 2,636 2,878 (8.4) 0.18 0.20
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Noninterest income, excluding securities
transactions 26,079 23,976 8.8 1.71 1.68
Securities gains (losses), net (94) 603 (115.6) (0.01) 0.04
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Total noninterest income $ 25,985 $ 24,579 5.7% 1.70% 1.72%
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NONINTEREST EXPENSE
Salaries and overtime $ 21,576 $ 21,049 2.5% 1.41% 1.47%
Fringe benefits and other personnel costs 6,181 5,415 14.1 0.41 0.38
Occupancy 3,338 3,093 7.9 0.22 0.22
Equipment 5,165 4,408 17.2 0.34 0.31
Foreclosed real estate losses and related
operating expense 324 138 134.8 0.02 0.01
Marketing 2,023 1,701 18.9 0.13 0.12
Professional fees 4,626 2,840 62.9 0.30 0.20
Other administrative 2,041 1,978 3.2 0.13 0.14
FDIC insurance 316 962 (67.2) 0.02 0.07
Deposit intangible and goodwill amortization 1,418 1,234 14.9 0.09 0.09
Office supplies, postage and telephone 4,506 3,872 16.4 0.30 0.27
Depreciation on leased equipment 1,918 2,025 (5.3) 0.13 0.14
Other operating 5,601 4,747 18.0 0.37 0.32
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Total noninterest expense $ 59,033 $ 53,462 10.4% 3.87% 3.74%
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OTHER PERFORMANCE RATIOS
Pretax operating profit margin + 32.37% 34.77% (240)bp
Efficiency ratio*** 64.47% 62.80% 167 bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.32% 9.46% (14)bp
Taxable securities 6.58 6.41 17
Tax-exempt securities 8.81 8.76 5
Short-term investments 5.40 4.57 83
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Interest-earning assets 8.57 8.62 (5)
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Total interest-bearing deposits 4.38 4.52 (14)
Borrowed funds 5.00 5.24 (24)
Long-term debt 6.28 6.46 (18)
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Total interest-bearing liabilities 4.58 4.73 (15)
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Interest rate spread 3.99 3.89 10
Net interest margin 4.58 4.51 7
==============================================================================================
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
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QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARY
1997 1996
------------ ------------------------------------------------------ 1St qtr 97
First Fourth Third Second First vs.
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter 4th Qtr 96
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FINANCIAL SUMMARY *
Assets $ 6,184,718 $ 6,197,670 $ 6,024,327 $ 5,848,330 $ 5,751,434 (0.2)%
Earning assets 5,692,783 5,703,321 5,544,087 5,384,075 5,305,364 (0.2)
Loans 4,107,133 4,181,963 4,097,846 3,954,978 3,820,022 (1.8)
Investment securities 1,552,675 1,491,008 1,407,955 1,395,395 1,450,207 4.1
Total deposits 4,657,405 4,723,099 4,592,544 4,348,934 4,353,866 (1.4)
Interest-bearing liabilities 4,955,541 4,944,155 4,813,779 4,692,359 4,610,606 0.2
Stockholders' equity 488,609 472,484 457,072 438,358 446,830 3.4
Total market capitalization (period end) 1,004,335 1,145,458 1,002,912 925,033 938,709 (12.3)
Net income 17,874 18,535 14,716 17,259 17,641 (3.6)
PROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating profit margin + 32.37% 32.02% 26.96% 33.53% 34.77% 35 bp
Efficiency ratio *** 64.47 65.09 70.38 63.71 62.80 (62)
Net interest margin # 4.58 4.66 4.61 4.58 4.51 (8)
Return on average assets # 1.17 1.19 0.97 1.19 1.23 (2)
Return on average equity # 14.84 15.61 12.81 15.84 15.88 (77)
Equity to assets (average) 7.90 7.62 7.59 7.50 7.77 28
PER SHARE SUMMARY
Earnings per share - primary $ 0.68 $ 0.70 $ 0.57 $ 0.67 $ 0.67 (2.9)%
Earnings per share - fully diluted 0.68 0.70 0.57 0.67 0.67 (2.9)
Cash dividends paid 0.25 0.25 0.25 0.25 0.25 --
Book value per share 19.08 18.51 18.04 17.27 17.43 3.1
Closing market price 39.000 44.625 38.625 36.750 36.750 (12.6)
KEY INTANGIBLE ASSETS **
Goodwill $ 63,122 $ 64,411 $ 66,348 $ 50,599 $ 51,584 (2.0)%
Deposit base premium 2,272 2,401 2,742 2,896 3,050 (5.4)
Mortgage servicing rights 21,481 21,046 19,712 17,114 16,122 2.1
ASSET QUALITY SUMMARY **
Nonperforming assets $ 26,768 $ 22,873 $ 20,398 $ 22,466 $ 21,104 17.0%
Allowance for loan losses 58,762 58,715 60,329 58,011 56,483 0.1
Nonperforming assets to total assets 0.42% 0.36% 0.33% 0.38% 0.36% 6 bp
Allowance for loan losses to loans 1.42 1.43 1.43 1.44 1.45 (1)
Net charge-offs to average loans # 0.28 0.41 0.13 0.09 0.07 (13)
====================================================================================================================================
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.
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