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 6, 1998
- --------------------------------------------------------------------------------
CENTURA BANKS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
North Carolina 1-10646 56-1688522
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<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: (252) 454-4400
- --------------------------------------------------------------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Exhibit Index on Page 4.
<PAGE>
Item 5. Other Events
On April 6, 1998, Centura Banks, Inc. ("Centura") announced earnings for the
three months ended March 31, 1998. Centura's net income increased 25.8 percent
to $22.5 million compared to $17.9 million for the same period one year ago.
Diluted earnings per share increased to $0.85 from $0.68 in the first quarter of
1997. 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: April 6, 1998 By: /s/ Steven Goldstein
Steven Goldstein
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Sequential
Page
Exhibit Description of Exhibit Number
- -------------------------------------------------------------------------------
99 Press release dated April 6, 1998 5
<PAGE>
For Immediate Release
April 6, 1998
For more information: Steven J. Goldstein
Centura Bank
252-454-8356
[email protected]
CENTURA BANK REPORTS 1ST QUARTER EARNINGS
ROCKY MOUNT, N.C. - Centura Banks Inc. (NYSE:CBC) today reported first
quarter 1998 net income of $22.5 million, an increase of 25.8% over the first
quarter of 1997. Diluted earnings per share in the first quarter rose to $0.85,
an increase of 25.0% over the comparable quarter of 1997.
Return on average equity increased 145 basis points from the prior year
same quarter to 16.29%, and return on average assets was 1.27%, a 10 basis point
improvement from the same period in 1997. The efficiency ratio declined 137
basis points to 63.10% from the comparable period in 1997, although increasing
marginally from the prior quarter. The ratio of net charge-offs to average total
loans was 25 basis points for the first quarter in 1998.
"We are pleased with the first quarter results which reflect the
continuing successful implementation of the strategy we adopted in 1993," said
Cecil W. Sewell, Centura's chairman and chief executive officer. "We have
expanded our insurance, securities, online banking, call center, and in-store
capabilities and are pleased with the growth of these businesses and their
contribution to first quarter earnings."
During the quarter Centura completed the acquisition of Pee Dee State
Bank in South Carolina and opened two full-service financial offices in
Hannaford supermarkets. Centura plans to open an additional five Hannaford
supermarket offices in North Carolina and Virginia by the end of the year.
Centura also finalized its acquisition of the Moore & Johnson insurance agency
in January, making Centura Insurance Services one of the largest independent
insurance agencies in North Carolina.
With assets of $7.5 billion, Centura provides a complete line of
banking, investment, leasing, insurance and trust services to individuals and
businesses in North Carolina, South Carolina and the Hampton Roads region of
Virginia. Services are provided through 199 financial service centers; more than
300 ATMs at financial centers, Wal-Mart stores and Sam's outlets; Centura
Highway; Centura's Internet site; and through Quicken(R), Quickbooks(R),
Microsoft(R) Money and BankNow(TM), the leading online money management software
packages. Additional information about Centura is available on its website at
www.centura.com.
###
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARIES
3 Months 3 Months
Ended Mar 31 Ended Mar 31
(In thousands, except share and per share data) 1998 1997 Change
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
EARNINGS
Interest income $ 136,721 $ 119,843 14.1%
Interest expense 66,099 55,958 18.1
----------------------------------------------------------------------------------
Net interest income 70,622 63,885 10.5
Provision for loan losses 3,393 2,894 17.2
Noninterest income 34,077 25,985 31.1
Noninterest expense 67,206 59,033 13.8
Income taxes 11,623 10,069 15.4
----------------------------------------------------------------------------------
Net income $ 22,477 $ 17,874 25.8%
==================================================================================
Net interest income, taxable equivalent $ 72,422 $ 65,577 10.4%
=================================================================================
PER COMMON SHARE
Earnings per share-basic $ 0.87 0.69 26.1%
Earnings per share-diluted 0.85 0.68 25.0
Cash dividends paid 0.27 0.25 8.0
Book value 21.62 19.08 13.3
Closing market price 71.25 39.00 82.7
FINANCIAL RATIOS
Return on average assets 1.27% 1.17% 10 bp
Return on average shareholders' equity 16.29 14.84 145
Average equity to average assets 7.80 7.90 (10)
AVERAGE BALANCES
Assets $ 7,171,199 $ 6,184,718 16.0%
Earning assets 6,538,033 5,692,783 14.8
Loans 4,659,863 4,107,133 13.5
Investment securities 1,847,024 1,552,675 19.0
Noninterest-bearing deposits 775,665 657,971 17.9
Core deposits 4,833,928 4,310,475 12.1
Total deposits 5,328,216 4,657,405 14.4
Interest-bearing liabilities 5,730,250 4,955,541 15.6
Shareholders' equity 559,568 488,609 14.5
PERIOD END BALANCES
Assets $ 7,517,103 $ 6,376,713 17.9%
Earning assets 6,837,615 5,825,818 17.4
Loans 4,849,441 4,140,583 17.1
Investment securities 1,964,362 1,663,427 18.1
Noninterest-bearing deposits 871,249 711,467 22.5
Core deposits 5,011,584 4,407,852 13.7
Total deposits 5,497,716 4,748,245 15.8
Shareholders' equity 574,224 491,367 16.9
- --------------------------------------------------------------------------------
bp Change is measured as difference in basis points.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
3 Months 3 Months
Ended Mar 31 Ended Mar 31
(In thousands, except share data) 1998 1997 Change
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES OUTSTANDING
Average basic 25,982,304 25,728,556 1.0%
Average diluted 26,522,065 26,240,592 1.1
Outstanding at period end 26,559,747 25,752,174 3.1
COMPOSITION RATIOS*
Earning assets to assets 91.17% 92.05% (88)bp
Loans to earning assets 71.27 72.15 (88)
Interest-bearing liabilities to earning assets 87.64 87.05 59
Loans to total deposits 87.46 88.19 (73)
Noninterest-bearing deposits to total deposits 14.56 14.13 43
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 64,279 $ 58,715 9.5%
Provision for loan losses 3,393 2,894 17.2
Allowance of acquired financial institutions 2,068 ---- ----
Charge-offs (3,844) (3,617) 6.3
Recoveries 932 770 21.0
----------------------------------------------------------------------------------------------
Net charge-offs (2,912) (2,847) 2.3
----------------------------------------------------------------------------------------------
Ending balance $ 66,828 $ 58,762 13.7%
==============================================================================================
Net charge-offs to average loans (annualized) 0.25% 0.28% (3)bp
==============================================================================================
COMPOSITION OF RISK ASSETS
Nonperforming loans $ 29,570 $ 22,767 29.9%
Foreclosed property 3,629 4,001 (9.3)
----------------------------------------------------------------------------------------------
Nonperforming assets $ 33,199 $ 26,768 24.0%
==============================================================================================
ASSET QUALITY RATIOS**
Nonperforming assets to:
Loans and foreclosed property 0.68 0.65 3 bp
Total assets 0.44 0.42 2
Nonperforming loans to total loans 0.61 0.55 6
Allowance for loan losses to total loans 1.38 1.42 (4)
Allowance for loan losses to nonperforming loans 2.26 2.58 (32)
- --------------------------------------------------------------------------------
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 SUBSIDIARIES
3 Months 3 Months As a Percent of
Ended Mar 31 Ended Mar 31 Average Assets#
(Dollars in thousands) 1998 1997 Change 1998 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NONINTEREST INCOME
Service charges on deposit accounts $ 10,586 $ 9,212 14.9% 0.60% 0.60%
Credit card and related fees 1,832 1,294 41.6 0.10 0.08
Insurance & brokerage commissions 5,415 3,244 66.9 0.31 0.21
Other service charges, commissions and fees 2,167 1,699 27.6 0.12 0.11
Fees for trust services 2,100 1,950 7.7 0.12 0.13
Mortgage income 3,217 2,673 20.4 0.18 0.18
Negative goodwill amortization 334 334 0.0 0.02 0.02
Operating lease fees 4,199 3,037 38.3 0.24 0.20
Other noninterest income 3,925 2,636 48.9 0.22 0.18
- -----------------------------------------------------------------------------------------------------
Noninterest income, excluding securities
transactions 33,775 26,079 29.5 1.91 1.71
Securities gains (losses), net 302 (94) (421.3) 0.02 (0.01)
- -----------------------------------------------------------------------------------------------------
Total noninterest income $ 34,077 $ 25,985 31.1% 1.93% 1.70%
=====================================================================================================
NONINTEREST EXPENSE
Salaries and overtime $ 25,223 $ 21,576 16.9% 1.43% 1.41%
Fringe benefits and other personnel 6,011 6,181 (2.8) 0.34 0.41
Occupancy 3,822 3,338 14.5 0.22 0.22
Equipment 5,228 5,165 1.2 0.30 0.34
Foreclosed real estate losses and related
operating expense 428 324 32.1 0.02 0.02
Marketing 2,325 2,023 14.9 0.13 0.13
Fees for outsourced services 2,895 1,532 89.0 0.16 0.10
Professional fees 3,337 3,094 7.9 0.19 0.20
Other administrative 2,457 2,041 20.4 0.14 0.13
FDIC insurance 361 316 14.2 0.02 0.02
Deposit intangible and goodwill amortization 2,213 1,418 56.1 0.13 0.09
Office supplies, postage and telephoe 4,361 4,506 (3.2) 0.25 0.30
Depreciation on leased equipment 2,494 1,918 30.0 0.14 0.13
Other operating 6,051 5,601 8.0 0.33 0.37
- ----------------------------------------------------------------------------------------------------
Total noninterest expense $ 67,206 $ 59,033 13.8% 3.80% 3.87%
====================================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin + 33.71% 32.37% 134 bp
Efficiency ratio*** 63.10% 64.47% (137)bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.26% 9.32% (6)bp
Taxable securities 6.67 6.58 9
Tax-exempt securities 8.89 8.81 8
Short-term investments 4.75 5.40 (65)
- ----------------------------------------------------------------------------------------------------
Interest-earning assets 8.52 8.57 (5)
- ----------------------------------------------------------------------------------------------------
Total interest-bearing deposits 4.37 4.38 (1)
Borrowed funds 5.28 5.00 28
Long-term debt 6.83 6.28 55
- ----------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 4.66 4.58 8
- ----------------------------------------------------------------------------------------------------
Interest rate spread 3.86 3.99 (13)
Net interest margin 4.43 4.58 (15)
================================================================================
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 SUBSIDIARIES
1998 1997 1st Qtr 98
----------- -----------------------------------------------------
First Fourth Third Second First vs.
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter 4th Qtr 97
- ----------------------------------------------------- ----------------------------------------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SUMMARY
Assets $ 7,171,199 $ 7,016,355 $ 6,738,633 $ 6,453,981 $ 6,184,718 2.2%
Earning assets 6,538,033 6,416,636 6,177,675 5,926,035 5,692,783 1.9
Loans 4,659,863 4,562,210 4,372,404 4,188,811 4,107,133 2.1
Investment securities 1,847,024 1,824,878 1,771,094 1,710,960 1,552,675 1.2
Total deposits 5,328,216 5,240,681 4,967,064 4,725,511 4,657,405 1.7
Interest-bearing liabilities 5,730,250 5,603,768 5,391,079 5,185,562 4,955,541 2.3
Stockholders' equity 559,568 531,935 519,175 501,027 488,609 5.2
Total market capitalization (period end) 1,892,382 1,784,504 1,425,753 1,183,788 1,004,335 6.0
Net income 22,477 23,504 21,700 19,980 17,874 (4.4)
PROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating profit margin + 33.71% 33.83% 35.03% 34.31% 32.37% (12) bp
Efficiency ratio *** 63.10 62.58 61.47 62.32 64.47 52
Net interest margin # 4.43 4.51 4.46 4.52 4.58 (8)
Return on average assets # 1.27 1.33 1.28 1.24 1.17 (6)
Return on average equity # 16.29 17.53 16.58 16.00 14.84 (124)
Equity to assets (average) 7.80 7.58 7.70 7.76 7.90 22
PER SHARE SUMMARY
Earnings per share - basic $ 0.87% $ 0.91 $ 0.84 $ 0.78 $ 0.69 (4.4)%
Earnings per share - diluted 0.85 0.89 0.82 0.76 0.68 (4.5)
Cash dividends paid 0.27 0.27 0.27 0.27 0.25 0.0
Book value per share 21.62 20.82 20.45 19.46 19.08 3.8
Closing market price 71.2500 69.0000 55.0625 45.8750 39.0000 3.3
KEY INTANGIBLE ASSETS **
Goodwill $ 107,293 $ 106,108 $ 97,027 $ 63,976 $ 65,394 1.1%
Mortgage servicing rights 28,147 28,238 28,275 23,028 21,481 (0.3)
ASSET QUALITY SUMMARY **
Nonperforming assets $ 33,199 $ 27,877 $ 28,633 $ 27,740 $ 26,768 19.1%
Allowance for loan losses 66,828 64,279 62,282 59,206 58,762 4.0
Nonperforming assets to total assets 0.44% 0.39% 0.42% 0.42% 0.42% 5 bp
Allowance for loan losses to loans 1.38 1.40 1.38 1.40 1.42 (2)
Net charge-offs to average loans # 0.25 0.22 0.26 0.26 0.28 3
================================================================================
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.
</TABLE>
