<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 22, 1999
-----------------
CENTURA BANKS, INC.
-------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
North Carolina 1-10646 56-1688522
- ------------------------------------------------- --------------------------------- -------------------------------------------
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number)
</TABLE>
134 North Church Street, Rocky Mount, North Carolina 27804
------------------------------------------------------------
(Address, including zip code, of principal executive office)
(252) 454-4400
--------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On August 22, 1999, Centura Banks, Inc. ("Centura") and Triangle Bancorp,
Inc. ("Triangle") entered into an Agreement and Plan of Reorganization (the
"Agreement"), pursuant to which Triangle will be acquired by Centura. The Boards
of Directors of Centura and Triangle approved the Agreement and the transactions
contemplated thereby at separate meetings held on August 22, 1999.
In accordance with the terms of the Agreement, Centura will acquire
Triangle pursuant to the merger (the "Merger") of Triangle with and into a
newly-formed, wholly-owned subsidiary of Centura ("Centura Merger Subsidiary"),
with Centura Merger Subsidiary as the surviving entity resulting from the
Merger.
Upon consummation of the Merger, each share of the no par value common
stock of Triangle ("Triangle Common Stock") (excluding shares held by Triangle,
Centura, or any of their respective subsidiaries, in each case other than in a
fiduciary capacity or as a result of debts previously contracted) issued and
outstanding at the effective time of the Merger (as defined in the Agreement,
the "Effective Time") shall be converted into and exchanged for .45 of a share
(subject to possible adjustment as described below, the "Exchange Ratio") of the
no par value common stock of Centura ("Centura Common Stock").
In addition, at the Effective Time, all rights with respect to Triangle
Common Stock, pursuant to stock options, stock appreciation rights, or stock
awards granted by Triangle under the existing stock plans of Triangle, which are
outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to Centura Common Stock on a basis
that reflects the Exchange Ratio.
The Merger is intended to constitute a tax-free transaction under the
Internal Revenue Code of 1986, as amended, and be accounted for as a pooling of
interests.
Consummation of the Merger is subject to various conditions, including:
(i) receipt of the approval by the stockholders of Triangle of appropriate
matters relating to the Agreement and the Merger as required to be approved
under applicable law; (ii) receipt of the approval by the stockholders of
Centura of the issuance of shares of Centura Common Stock pursuant to the Merger
as required to be approved under applicable law; (iii) receipt of certain
regulatory approvals from the Board of Governors of the Federal Reserve System,
certain state regulatory authorities, and certain other regulatory authorities;
(iv) receipt of an opinion of counsel as to the tax-free nature of certain
aspects of the Merger; (v) receipt of a letter from KPMG Peat Marwick LLP to the
effect that the Merger will qualify for pooling-of-interests accounting
treatment; and (vi) satisfaction of certain other conditions.
Under the Agreement, Triangle has the right to terminate the Agreement if
the Average Closing Price (as defined below) of Centura Common Stock (i) is less
than 0.80 times the Starting Price (as defined below) and (ii) reflects a
decline, on the Determination Date (as defined below) of more than 15% below a
weighted index of the stock prices of a
-2-
<PAGE> 3
group of 13 bank holding companies designated in the Agreement. In the event
that Triangle gives notice of its intention to terminate the Agreement based on
such provision, Centura has the right, within five (5) days of Centura's receipt
of such notice, to elect to adjust the Exchange Ratio in accordance with the
terms of the Agreement, and, thereby remove Triangle's right to terminate.
For purposes of the Agreement, the Average Closing Price means the
average of the daily last sales price of Centura Common Stock as reported on the
NYSE - Composite Transactions List (as reported by The Wall Street Journal or,
if not reported thereby, another authoritative source as chosen by Centura) for
the ten consecutive full trading days in which such shares are traded on the New
York Stock Exchange ending at the close of trading on the Determination Date.
The Determination Date means the later of the date on which (i) the consent of
the Board of Governors of the Federal Reserve System to the Merger is received
and (ii) the Triangle and Centura Stockholders approve the Merger.
For purposes of the Agreement, the Starting Price means the last sales
prices of Centura Common Stock as reported on the NYSE - Composite Transactions
List (as reported by The Wall Street Journal or, if not reported thereby,
another authoritative source as chosen by Centura) on August 20, 1999, the last
full trading day preceding the announcement by press release of the Merger
In connection with executing the Agreement, Centura and Triangle entered
into (i) a stock option agreement (the "Triangle Stock Option Agreement")
pursuant to which Triangle granted to Centura an option to purchase up to
5,014,000 shares of Triangle Common Stock (representing 19.9% of the outstanding
shares of Triangle Common stock without giving effect to the exercise of the
option), at a purchase price of $18.00 per share, upon certain terms and in
accordance with certain conditions, and (ii) a stock option agreement (the
"Centura Stock Option Agreement") pursuant to which Centura granted to Triangle
an option to purchase up to 2,256,000 shares of Centura Common Stock
(representing 8.2% of the outstanding shares of Centura Common Stock without
giving effect to the exercise of the option), at a purchase price of $56.87 per
share, upon certain terms and in accordance with certain conditions. Under the
terms of each of the Triangle Stock Option Agreement and the Centura Stock
Option Agreement, the Total Profit (as defined in the stock option agreements)
and the Notional Total Profit (as defined in the stock option agreements) that a
holder may realize, as a result of exercising the stock option agreement may not
exceed $25 million.
The Agreement and the Merger will be submitted for approval at separate
meetings of the stockholders of Triangle and Centura. Prior to such stockholders
meetings, Centura will file a registration statement with the Securities and
Exchange Commission registering under the Securities Act of 1933, as amended,
the shares of Centura Common Stock to be issued in exchange for the outstanding
shares of Triangle Common Stock. Such shares of stock of Centura will be offered
to the Triangle stockholders pursuant to a prospectus that will also serve as a
joint proxy statement for the separate meetings of the stockholders of Triangle
and Centura, respectively.
-3-
<PAGE> 4
A copy of a joint news release (the "News Release") relating to the
Merger is being filed as Exhibit 99.1 to this report and is incorporated herein
by reference.
On August 23, 1999, Centura intends to hold a meeting (the "Meeting")
with analysts and others with respect to the Merger. At the Meeting, certain
financial and other information relating to the Merger is to be presented (the
"Presentation Materials"). The News Release and certain of the Presentation
Materials contain, among other things, certain forward-looking statements
regarding each of Centura, Triangle, and the combined company following the
Merger, including statements relating to cost savings, enhanced revenues, and
accretion to reported earnings that may be realized from the Merger, and certain
restructuring charges expected to be incurred in connection with the Merger.
Such forward-looking statements involve certain risks and uncertainties,
including a variety of factors that may cause Centura's actual results to differ
materially from the anticipated results or other expectations expressed in such
forward-looking statements. Factors that might cause such a difference include,
but are not limited to: (i) expected cost savings from the Merger may not be
fully realized or realized within the expected time frame; (ii) revenues
following the Merger may be lower than expected, or deposit attrition, operating
costs or customer loss and business disruption following the Merger may be
greater than expected; (iii) competitive pressures among depository and other
financial institutions may increase significantly; (iv) costs or difficulties
related to the integration of the business of Centura and Triangle may be
greater than expected; (v) changes in the interest rate environment may reduce
margins; (vi) general economic or business conditions, either nationally or in
the states or regions in which Centura does business, may be less favorable than
expected, resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit; (vii) legislative or regulatory changes may
adversely affect the businesses in which Centura is engaged; and (viii) changes
may occur in the securities markets. Additional information with respect to
factors that may cause actual results to differ materially from those
contemplated by such forward-looking statements is included in Centura's current
and subsequent filings with the Securities and Exchange Commission.
A copy of the visual portion of the Presentation Materials is being filed
as Exhibit 99.2 to this report, substantially in the form intended to be
presented at the Meeting, and such materials are incorporated herein by
reference.
ITEM 7. EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Page No.
- ------- ----------
<S> <C> <C>
99.1 Text of the News Release, dated August 23, 1999,
issued by Centura Banks, Inc. and Triangle Bancorp, Inc......... 7
99.2 The Presentation Materials...................................... 10
</TABLE>
-4-
<PAGE> 5
SIGNATURE
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 hereunto duly authorized.
CENTURA BANKS, INC.
(Registrant)
By: /s/ Steven J. Goldstein
----------------------------
Steven J. Goldstein
Chief Financial Officer
Date: August 23, 1999
-5-
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Page No.
- ------- ----------
<S> <C> <C>
99.1 Text of the News Release, dated August 23, 1999,
issued by Centura Banks, Inc. and Triangle Bancorp, Inc......... 7
99.2 The Presentation Materials...................................... 10
</TABLE>
-6-
<PAGE> 1
For Immediate Release
For More Information Analysts and Investors News Media
Steven Goldstein Clare Condon
Chief Financial Officer (252)454-4812
(252)454-8356
EXHIBIT 99.1
CENTURA TO ACQUIRE TRIANGLE BANCORP
IN-MARKET ACQUISITION WILL GREATLY STRENGTHEN NORTH CAROLINA FRANCHISE
ROCKY MOUNT, N.C., August 23, 1999 - Centura Banks, Inc. (NYSE: CBC) and
Triangle Bancorp, Inc. (NYSE:TGL) announced today that they have reached a
definitive agreement under which Centura will acquire Raleigh, N.C.-based
Triangle in a stock transaction valued at $608.4 million, or $23.40 per Triangle
share.
Centura and Triangle will conduct a conference call today at 9:30 a.m. EDT to
discuss the transaction. The number for the conference call is (800) 289-0730.
The merger will significantly expand Centura's market share in key metropolitan
areas throughout North Carolina. For example, the combined company in the
Raleigh/Durham MSA will have deposits of over $1.0 billion and 34 locations.
Centura currently operates 227 locations throughout North Carolina, Virginia and
South Carolina, with total assets of $8.8 billion and deposits of $6.0 billion.
Triangle Bancorp has assets of $2.3 billion and deposits of $1.8 billion, and
operates 71 locations in Charlotte and central and eastern North Carolina.
"Our acquisition of Triangle is a win-win situation for all our constituencies,"
said Cecil W. Sewell, Centura chairman and chief executive officer. "Triangle is
an exceptionally well-run organization that will allow us to greatly strengthen
our North Carolina franchise and further leverage our business strategy to the
benefit of the customers of the combined company. This in turn will help us
achieve our financial objectives of producing sustained, superior financial
returns for our shareholders."
Under terms of the transaction, each Triangle shareholder will receive 0.45
shares of Centura stock for each Triangle share. Based on Centura's closing
price of $52.00 on Aug. 20, 1999 the offer is approximately 3.6 times Triangle's
June 30, 1999, book value and 24.3 times trailing four quarter earnings per
share. The transaction, approved by the board of directors of both companies,
will be accounted for as a pooling of interests.
Centura expects the merger to be accretive to earnings per share in 2001. It is
estimated that pre-tax cost savings opportunities, including the elimination of
redundant operations, will total approximately $32.0 million once the
acquisition is fully integrated. The transaction is projected to be 2.4%
dilutive to Centura's earnings per share in 2000. The dilution is concentrated
in the quarter of closing, before the realization of the cost savings. Merger
related charges of $50.0 million pre-tax in the quarter of closing and an
additional $10.0 million in the following quarter are anticipated.
"We are pleased to be joining Centura," said Michael S. Patterson, Triangle's
chairman, president and chief executive officer. "As part of the Centura
organization, we will be able to offer our customers an expanded array of
financial products and services. Centura's sophisticated delivery channels and
customer information database will help us better serve the customers of the
combined organization."
<PAGE> 2
PAGE 2 OF 3
AUGUST 20, 1999
Sewell added: "Our number one objective in the execution of this Merger is to
have a positive impact on the customers of both companies. In most all affected
markets, Centura will be stronger, with more locations and access options.
Customer service will be our first priority and will guide all our decisions as
we move to combine the two companies.
On completion of the acquisition, which is expected to close late in the first
quarter of 2000, Mr. Patterson will assume the role of chairman of Centura's
30-member board of directors including 7 new directors from Triangle. Mr. Sewell
will remain chief executive officer, with headquarters remaining in Rocky Mount.
The transaction is subject to normal shareholder and regulatory approvals.
The combined organization will strengthen Centura's North Carolina franchise by
increasing market share and leveraging the company's business lines across an
additional 80,000 households. The majority of the households are in MSA market
areas where there is proven revenue growth opportunity. As a retailer of
financial services, Centura offers a complete line of banking, investment and
insurance solutions to its customers, focusing primarily on individuals and
small businesses. Centura currently serves approximately 400,000 households
in North Carolina, Virginia and South Carolina.
The acquisition allows Centura to also leverage its business strategy and
technological investments across a broader customer base. Centura is
implementing an e-commerce strategy and has developed a sophisticated customer
information database that allows the company to customize financial-services
solutions to individual customer needs.
"Our customer information database has allowed us to establish a proven track
record of targeting and retaining high-value customers," Sewell noted. "We
intend to leverage this system to focus on retention of Triangle's customers to
assure the true value of the franchise is maintained."
"We also consider this a very low-risk transaction," he continued. "Both Centura
and Triangle have extensive merger integration experience, our organizations
have complementary cultures and several members of management have worked
together in the past."
"This acquisition, when fully integrated, will help Centura achieve and sustain
our financial objective of becoming a high-performance financial-services
company," Sewell said. "The combination of cost savings, market penetration and
leveraged technology will provide improved financial performance."
Centura provides a complete line of banking, investment, insurance, leasing and
asset management services to individuals and businesses in North Carolina, South
Carolina and Virginia. Centura's broad range of financial solutions are provided
through full-service financial offices and Centura Highway, the bank's
multifaceted customer access system that includes telephone banking, an
extensive ATM network, PC banking, online bill payment and CenturaHighway.com,
the bank's suite of Internet products and services. Additional information may
be found on Centura's main Web site at www.Centura.com.
Triangle Bancorp is the holding company for Triangle Bank, Bank of Mecklenburg
in Charlotte, N.C., and Coastal Leasing in Greenville, N.C. serving central and
eastern North Carolina.
Safe harbor factors:
<PAGE> 3
CENTURA DRAFT
PAGE 3 OF 3
AUGUST 20, 1999
The news release contains, among other things, certain forward-looking
statements regarding each of Centura, Triangle, and the combined company
following the merger, including statements relating to cost savings, enhanced
revenues, and accretion to reported earnings that may be realized from the
merger, and certain restructuring charges expected to be incurred in connection
with the merger. Such forward-looking statements involve certain risks and
uncertainties, including a variety of factors that may cause Centura's actual
results to differ materially from the anticipated results or other expectations
expressed in such forward-looking statements. Factors that might cause such a
difference include, but are not limited to: (i) expected cost savings from the
merger may not be fully realized or realized within the expected time frame;
(ii) revenues following the merger may be lower than expected, or deposit
attrition, operating costs or customer loss and business disruption following
the merger may be greater than expected; (iii) competitive pressures among
depository and other financial institutions may increase significantly; (iv)
costs or difficulties related to the integration of the business of Centura and
Triangle may be greater than expected; (v) changes in the interest rate
environment may reduce margins; (vi) general economic or business conditions,
either nationally or in the states or regions in which Centura does business,
may be less favorable than expected, resulting in, among other things, a
deterioration in credit quality or a reduced demand for credit; (vii)
legislative or regulatory changes may adversely affect the businesses in which
Centura is engaged; and (viii) changes may occur in the securities markets.
Additional information with respect to factors that may cause actual results to
differ materially from those contemplated by such forward-looking statements is
included in Centura's current and subsequent filings with the Securities and
Exchange Commission.
END
<PAGE> 1
EXHIBIT 99.2
CENTURA BANKS, INC.
AND
TRIANGLE BANCORP, INC.
LEVERAGING THE STRATEGY - IN MARKET
INVESTOR PRESENTATION
AUGUST 23, 1999
<PAGE> 2
CAUTIONARY STATEMENT
- - A number of statements we will be making in our presentation and in the
accompanying slides will be "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, such as statements
of the Corporation's plans, goals, objectives, expectations, projections,
estimates, and intentions. These forward-looking statements involve
significant risks and uncertainties and are subject to change based on
various factors (some of which are beyond the Corporation's control).
Factors that might cause such a difference include, but are not limited to:
(i) expected cost savings from the merger may not be fully realized or
realized within the expected time frame; (ii) revenues following the merger
may be lower than expected, or deposit attrition, operating costs or
customer loss and business disruption following the merger may be greater
than expected; (iii) competitive pressures among depository and other
financial institutions may increase significantly; (iv) costs or
difficulties related to the integration of the business of Centura and
Triangle may be greater than expected; (v) changes in the interest rate
environment may reduce margins; (vi) general economic or business
conditions, either nationally or in the states or regions in which Centura
does business, may be less favorable than expected, resulting in, among
other things, a deterioration in credit quality or a reduced demand for
credit; (vii) legislative or regulatory changes may adversely affect the
businesses in which Centura is engaged; and (viii) changes may occur in the
securities markets. Additional information with respect to factors that may
cause actual results to differ materially from those contemplated by such
forward-looking statements is included in Centura's current and subsequent
filings with the Securities and Exchange Commission.
- - In addition to the foregoing, a significant portion of the financial
information presented has not been prepared based on GAAP and is derived
from internal management reporting sources.
2
<PAGE> 3
TRANSACTION OBJECTIVE
TO PRODUCE SUPERIOR FINANCIAL RETURNS BY INCREASING SHARE IN MARKETS WHERE
CENTURA HAS A PROVEN ABILITY TO MEET THE DIVERSE FINANCIAL NEEDS OF OUR
CUSTOMERS.
3
<PAGE> 4
COMPANY OVERVIEWS
4
<PAGE> 5
CENTURA BANKS, INC.
[BRANCH MAP]
- - $8.8 billion in assets
- - $6.0 billion in deposits
- - 227 Branches
- - 185 traditional 42 in-store
- - 3 Regional Insurance Offices
- - 240 ATMs
- - 36 Series 7 Brokers
KEY CITIES (# OF BRANCHES)
RALEIGH/DURHAM (15)
HAMPTON ROADS (25)
GREENSBORO (5)
ROCKY MOUNT (9)
GREENVILLE (3)
WINSTON-SALEM (5)
FAYETTEVILLE (8)
WILMINGTON (7)
CHARLOTTE (10)
5
<PAGE> 6
TRIANGLE BANCORP, INC.
[BRANCH MAP]
KEY CITIES (# OF BRANCHES)
RALEIGH/DURHAM (11)
ROCKY MOUNT (4)
GREENVILLE (3)
GOLDSBORO (3)
FAYETTEVILLE (2)
WILMINGTON (1)
CHARLOTTE (3)
- - $2.3 billion in assets
- - $1.8 billion in deposits
- - 71 Branches
- - 65 traditional 6 in-store
- - 51 ATMs
6
<PAGE> 7
NORTH CAROLINA MARKET CHARACTERISTICS
- - Unemployment rate - 2.7% (seasonally adjusted June 1999)
- - 11th most populated state and projected to remain so thru 2025
- - 1997-1998- 5th largest population gain of any state
- - 7.2 million population - expected to add 2.2 million in next 30 years
- - Predicted to have 7th largest net population gain in the next three decades
- - Highly diversified economy
- - NC ranked #1 state for business expansion by Plant, Sites and Parks
Magazine- 1997
7
<PAGE> 8
TRANSACTION SUMMARY
8
<PAGE> 9
TRANSACTION SUMMARY
- - Fixed Exchange Ratio: 0.45 CENTURA SHARES FOR EACH TRIANGLE SHARE
- - Right to Walk/Cure 20% ABSOLUTE, 15% VERSUS INDEX OF BANK
STOCKS
- - Lock-up Options 19.9% OF TRIANGLE'S SHARES TO CENTURA AND 8.2%
OF CENTURA'S SHARES TO TRIANGLE
- - Price per Triangle Share(1): $23.40
- - Structure: POOLING OF INTERESTS/TAX-FREE EXCHANGE
- - Transaction Value(1): $608 MILLION
- - Expected Closing: LATE FIRST QUARTER OF 2000
- - Due Diligence: COMPLETED
- - Integration conversion: LATE FIRST QUARTER OF 2000
(1) Based on Centura's closing price of $52.00 on August 20, 1999.
9
<PAGE> 10
TRANSACTION SUMMARY
- - Management: MICHAEL S. PATTERSON (TRIANGLE) -
CHAIRMAN OF THE BOARD
CECIL W. SEWELL, JR. (CENTURA) -
CHIEF EXECUTIVE OFFICER
- - Board of Directors: 30 MEMBER BOARD:
CENTURA 23
TRIANGLE 7
- - Name: CENTURA BANKS, INC.
- - Headquarters: ROCKY MOUNT, NC
10
<PAGE> 11
BUSINESS CASE
11
<PAGE> 12
STRENGTHEN NORTH CAROLINA FRANCHISE
The transaction will significantly strengthen the North Carolina franchise by
leveraging all business lines across an expanded customer base.
<TABLE>
<CAPTION>
BUSINESS LINES CENTURA TRIANGLE
- --------------------------------------------------------
<S> <C> <C>
Asset Management Y
Capital Markets Y
Cash Management Y Y
Commercial Banking Y Y
Corporate Banking Y
Insurance Y
International Services Y
Leasing Y Y
Retail Banking Y Y
Retail Brokerage Y Y
SBA Lending Y Y*
- --------------------------------------------------------
</TABLE>
* Leading SBA Lender in North Carolina through first 9 months of SBA's 1999
fiscal year
12
<PAGE> 13
INCREASE PRESENCE IN MSA MARKETS
The transaction will enhance Centura's presence in MSA markets where there is
proven revenue growth opportunity, and will enhance financial performance in
smaller community markets.
<TABLE>
<CAPTION>
100% NORTH CAROLINA OVERLAP TRIANGLE DEPOSIT COMPOSITION
<S> <C>
[NORTH CAROLINA MAP] [PIE CHART]
Centura Only
Triangle Only MSA 71%
Overlap Non-MSA 29%
</TABLE>
13
<PAGE> 14
PRO FORMA MSA MARKET SHARE
<TABLE>
<CAPTION>
----------------------------------------------------- ------------------------------------------------
DEPOSITS MARKET SHARE RANK
----------------------------------------------------- ------------------------------------------------
CENTURA TRIANGLE PRO CENTURA TRIANGLE PRO
MSA STAND ALONE STAND ALONE FORMA* STAND ALONE STAND ALONE FORMA*
- ------------------- --------------- ------------- -------------- ------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Raleigh/Durham $ 633,579 $ 504,970 $ 1,138,549 7 8 5
Rocky Mount 672,144 248,514 920,658 1 2 1
Charlotte 252,274 196,731 449,005 10 11 9
Wilmington 205,425 31,443 236,868 5 12 5
Fayetteville 160,257 30,184 190,441 4 8 3
Goldsboro 88,383 72,099 160,482 3 5 3
Greenville 100,312 47,855 148,167 5 6 3
<CAPTION>
----------------------------------------------------- ------------------------------------------------
DEPOSITS MARKET SHARE RANK
----------------------------------------------------- ------------------------------------------------
CENTURA TRIANGLE PRO CENTURA TRIANGLE PRO
NON-MSA OVERLAP STAND ALONE STAND ALONE FORMA* STAND ALONE STAND ALONE FORMA*
- ------------------- --------------- ------------- -------------- ------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Harnett County $ 48,192 $ 71,406 $ 119,598 5 4 2
Robeson County 36,108 78,907 115,015 6 4 3
Granville County 50,637 57,961 108,598 4 3 2
</TABLE>
* Before expected divestitures
14
<PAGE> 15
INCREASED REVENUE
The acquisition of Triangle's 80,000 households will enable Centura to
accelerate revenue growth.
[GRAPH]
<TABLE>
<CAPTION>
Households Revenue
(Thousands) (Millions)
<S> <C> <C>
4Q96 333.295 95.04
332.428 91.56
2Q97 326.731 94.67
358.322 99.51
4Q97 367.043 105.22
382.005 104.01
2Q98 383.428 109.74
393.242 114.15
4Q98 373.608 115.18
396.363 114.76
2Q99 395.919 124.73
4Q99 397 128
400 139
2Q00 465 131
467 155
466 160
4Q00 470 167
469 166
2Q01 472 175
475 180
4Q01 475 188
</TABLE>
Before expected divestitures
15
<PAGE> 16
FOCUS RETENTION STRATEGY
Centura has a proven track record of targeting and retaining high value
customers. Centura will focus on Triangle's 16,650 high value customers to
assure that the true value of the franchise is maintained.
[BAR CHART]
<TABLE>
<CAPTION>
ANNUAL RETENTION CONSOLIDATION RETENTION
(5 traditional branches into In-Stores)
<S> <C>
99.2%
93%
90% 97.2%
88%
91.2%
84%
96 97 98 99E 1 2 All
Centura's Best Customer Retention Profit Segment
</TABLE>
16
<PAGE> 17
AVERAGE HOUSEHOLD PROFIT
If Triangle's household profitability increases over the next two years at the
same rate that Centura's average household profitability increased over the
last two years, Centura will realize an additional $6.7 million in pre-tax
income by 2001.
[BAR CHART]
<TABLE>
<CAPTION>
CENTURA TRIANGLE (ESTIMATED)
$Profit Per Household $Profit Per Household
<S> <C>
96 $38.21 98 $35.00
97 $40.06 99E $39.00
98 $43.29 00E $43.00
</TABLE>
17
<PAGE> 18
LOW RISK TRANSACTION
Both Centura and Triangle have extensive merger integration experience. Since
Centura operates in each of Triangle's markets, a successful, smooth transition
is expected.
- - Successful 5 Year Acquisition and Integration History
-- Centura 13 acquisitions
-- Triangle 10 acquisitions
- - Cost Savings
-- Close and consolidate 26 Triangle or Centura branches in overlapping
markets
-- Divest additional branches as required by the Fed
-- Reprice Triangle's CD portfolio over the next two years, reducing
its average cost of CDs by 40 bps. This will lower Triangle's CD
cost to 5.20% compared to Centura's cost of 5.05%.
-- Eliminate significant administrative and support redundancies
- - Compatible Cultures
-- Retail/Small Business focus
-- Customer-centric
-- Several members of Senior Management have worked together in the
past
18
<PAGE> 19
LEVERAGE PAST AND FUTURE INVESTMENTS
The Triangle transaction enables Centura to build on its investments in:
- - Distribution and Access
-- Call Center
-- Internet/PC
-- ATMs
-- In-Stores
- - Database Technology
-- Information at the point of customer contact
-- Predictive Modeling
Human Capital
-- Extensive Recruiting and Training
19
<PAGE> 20
FINANCIAL INFORMATION
20
<PAGE> 21
CENTURA'S INVESTMENT CRITERIA
- - EPS Accretive by Year 2
- - EVA Accretive by Year 3
- - Positive PV EVA
21
<PAGE> 22
FINANCIAL SUMMARY
<TABLE>
<CAPTION>
6 Months Ended 6/30/99
----------------------
*Centura(%) Triangle(%)
----------- -----------
<S> <C> <C>
ROA 1.26 1.26
ROE 15.92 16.18
Net Interest Margin 4.24 4.10
Efficiency Ratio 60.58 48.89
Noninterest Income as % of Total Revenue 31.10 20.10
Net Charge Offs/Average Loans 0.35 0.31
</TABLE>
* Excludes the Restructuring charge ($8.4 Million before-tax) related to the
merger with First Coastal Bankshares, Inc. completed March 26, 1999.
22
<PAGE> 23
FINANCIAL ASSUMPTIONS
<TABLE>
<S> <C>
- - Cost Savings Reduction in non-interest expense
- 2000: $23.0 million pre-tax (41% of Triangle's pre-
transaction expense)
- 2001: $32.0 million pre-tax (55% of Triangle's pre-
transaction expense)
- - Impact of Divestitures:
- Divested Deposits Anticipate $200.0-$300.0 million, model assumes
$300.0 million divestiture
- Divested Income $1.0 million after-tax in 2000
$1.3 million after-tax in 2001
- - Impact of CD Repricing: Reduction in pricing of CD portfolio
- 2000: 20 bps ($1.8 million pre-tax)
- 2001: 40 bps ($3.6 million pre-tax)
- - Merger-Related Charge: $50.0 million pre-tax in quarter of closing
$10.0 million pre-tax in next quarter
- - Revenue Enhancements: No other assumed
</TABLE>
23
<PAGE> 24
RECENT COMPARABLE TRANSACTIONS
Nationwide In-Market/Overlapping Transactions with deal values between $200M
and $1B; since 8/23/97
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSACTION PARTICIPANTS & DETAILS TRANSACTION MULTIPLES
- ----------------------------------------------------------------------------------------------------------------------------------
COST DEAL
ANN. SVGS VALUE
DATE BUYER ST SELLER ST (%) ($M)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
08/23/99 Centura Banks, Inc.** NC Triangle Bancorp NC 55 608
7/28/99 BB&T Corporation NC Premier Bancshares Inc. GA 25 598
7/12/99 Fifth Third Bancorp OH Peoples Bank Corp. of Indianapolis IN NA 230
6/30/99 Webster Financial Corp. CT New England Comm Bancorp Inc. CT 55 219
6/7/99 Sky Financial Group Inc. OH Mahoning National Bancorp Inc. OH 30 307
6/2/99 Peoples Heritage Fnl ME Banknorth Group Inc. VT 30 778
5/7/99 Zions Bancorporation UT Pioneer Bancorporation NV 15 347
12/16/98 Chittenden Corporation VT Vermont Financial Services Corp. VT 35 454
8/27/98 BB&T Corporation NC MainStreet Financial Corp. VA 30 540
8/11/98 FirstMerit Corporation OH Signal Corp. OH 34 473
7/16/98 First Commonwealth Fnl PA Southwest National Corporation PA NA 270
5/28/98 First American Corp. TN Pioneer Bancshares Inc. TN 40 292
4/21/98 Old Kent Financial Corp. MI First Evergreen Corporation IL 30 482
1/15/98 First Midwest Bancorp IL Heritage Financial Services Inc. IL 30 408
9/11/97 United Bankshares Inc. WV George Mason Bankshares Inc. VA 20 208
------------------------
AVERAGE 31 400
MEDIAN 30 377
<CAPTION>
- --------------------------------------------------------------------------------------------
TRANSACTION MULTIPLES SELLER'S DATA
- --------------------------------------------------------------------------------------------
PRICE/ PRICE/ PRICE/ PRICE/ TOTAL
ANN. BOOK TNG BK EPS* ASSETS ASSETS ROA ROE
DATE (%) (%) (x) (%) ($M) (%) (%)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
08/23/99 356 412 24.33 26.60 2,285 1.26 16.18
7/28/99 339 347 22.07 30.35 1,511 1.58 16.60
7/12/99 418 418 27.44 35.35 650 1.23 15.25
6/30/99 290 310 27.59 27.79 787 1.11 11.77
6/7/99 316 316 21.44 37.91 809 1.85 15.40
6/2/99 235 306 22.05 17.94 4,339 1.23 16.75
5/7/99 513 513 26.07 33.60 1,031 1.44 21.52
12/16/98 208 286 27.94 21.52 2,110 0.89 8.71
8/27/98 320 340 27.38 25.49 2,042 1.02 12.68
8/11/98 322 467 23.40 31.12 1,520 1.09 15.26
7/16/98 326 326 30.78 36.36 742 1.17 10.46
5/28/98 284 301 29.69 29.40 993 0.97 9.47
4/21/98 243 248 26.68 24.95 1,933 0.94 9.51
1/15/98 338 394 24.15 31.75 1,285 1.39 16.12
9/11/97 291 292 26.31 21.63 963 0.89 11.75
------------------------------------------------------------------------------
AVERAGE 317 347 25.93 28.94 1.20 13.66
MEDIAN 318 321 26.50 29.88 1.14 13.97
</TABLE>
* EPS for the last four quarters prior to announce
** Not included in averages or medians
24
<PAGE> 25
ESTIMATED PRE-TAX COST SAVINGS (FULLY PHASED-IN)
<TABLE>
<CAPTION>
Total
($ in Millions)
---------------
<S> <C>
Personnel
Branch $ 8.0
Administrative 10.0
---------------
18.0
---------------
Facilities and Equipment
Branch 5.0
Administrative 3.0
---------------
8.0
---------------
Other 6.0
---------------
TOTAL $ 32.0
===============
</TABLE>
25
<PAGE> 26
MERGER RELATED CHARGES
<TABLE>
<CAPTION>
Total
($ in Millions)
---------------
<S> <C>
Conversion Costs $ 12.0
Employee Related 18.0
Occupancy/Equipment Writedowns 15.0
Other 15.0
---------------
Total Pre-Tax Merger Related Charges $ 60.0
===============
Total After-Tax Merger Related Charges $ 39.0
===============
</TABLE>
26
<PAGE> 27
EPS ACCRETION
<TABLE>
<CAPTION>
($ in Millions, except per share) 2000E 2001E
- ----------------------------------------------- --------- ---------
<S> <C> <C>
Centura EPS (1) $ 4.46 $ 4.91
Centura Net Income (1) 128.89 141.90
Triangle Net Income (1) 31.20 34.32
--------- ---------
Combined Net Income 160.09 176.21
Cost Savings (after-tax) 15.02 21.02
Divestitures (after-tax) (1.00) (1.34)
Earnings on Reinvested Capital (after-tax) (2) 1.46 1.95
Savings on CD Repricing (after-tax) 1.18 2.36
--------- ---------
Pro Forma Earnings $ 176.75 $ 200.16
--------- ---------
Pro Forma EPS $ 4.35 $ 4.93
========= =========
- -----------------------------------------------------------------------
EPS Accretion (2.4%) 0.4%
- -----------------------------------------------------------------------
</TABLE>
(1) IBES consensus estimates for 2000 and grown at 10% thereafter.
(2) Assumes after-tax earnings of 10% on reinvested capital.
27
<PAGE> 28
PRO FORMA FINANCIAL SUMMARY
<TABLE>
<CAPTION>
Pro Forma
---------
Fully Phased-In(%)*
-------------------
<S> <C>
ROA 1.51
ROE 18.23
Net Interest Margin 4.37
Efficiency Ratio 52.61
Noninterest Income as % of Total Revenue 29.31
Net Charge Offs/Average Loans 0.34
</TABLE>
* Excludes the Restructuring charge ($8.4 Million before-tax) related to the
merger with First Coastal Bankshares, Inc. completed March 26, 1999.
* Assumes branch divestitures of $300 million.
28
<PAGE> 29
SUMMARY
The transaction with Triangle achieves these objectives:
- - Strengthens North Carolina Franchise
- - Leverages Centura's Strategy and Investments
- - Low Risk
- - Achieves Financial Objectives
29
<PAGE> 30
APPENDIX
30
<PAGE> 31
STRONG BALANCE SHEET AND SUPERIOR CREDIT QUALITY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Centura(%) Triangle(%) Combined(%)*
6/30/99 6/30/99
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Average Equity / Assets 7.92 7.77 8.29
Average Tangible Equity / Assets 6.18 6.80 6.67
Loans / Earning Assets 72.18 71.25 72.67
NCOs / Average Loans 0.35 0.32 0.35
NPAs / Assets 0.68 0.23 0.61
NPLs / Loans 0.96 0.23 0.83
- --------------------------------------------------------------------------------
</TABLE>
* Assumes branch divestitures of $300 million.
31
<PAGE> 32
LOAN COMPOSITION
(At June 30, 1999; Dollars in millions)
<TABLE>
<CAPTION>
Centura Triangle Combined
Amount (%) Amount (%) Amount (%)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Residential Mortgages $ 1,518.3 26.0% $ 335.5 22.2% $ 1,853.8 25.2%
Commercial Loans & Leases 1,507.5 25.8 243.9 16.2 1,751.4 23.8
Commercial Mortgages 1,266.2 21.7 443.9 29.4 1,710.2 23.3
Construction & Land Dev. 748.8 12.8 259.0 17.2 1,007.8 13.7
Home Equity Loans 245.8 4.2 97.5 6.5 343.3 4.7
Credit Cards 76.6 1.3 11.0 0.7 87.6 1.2
Other (Including Consumer) 478.4 8.2 118.5 7.8 596.9 8.1
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $ 5,841.6 100.0% $ 1,509.3 100.0% $ 7,351.0 100.0%
</TABLE>
32
<PAGE> 33
DEPOSIT COMPOSITION
(At June 30, 1999; Dollars in millions)
<TABLE>
<CAPTION>
Centura* Triangle Combined
Amount % Amount % Amount %
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Non-Interest Bearing $ 982.1 16.3% $ 228.9 13.1% $ 1,211.0 15.6%
Interest Bearing:
NOW Accounts $ 754.9 12.5 $ 180.8 10.3 $ 935.7 12.0
Money Market 1,677.2 27.8 289.8 16.5 1,967.0 25.3
CDs <$100,000 1,621.1 26.9 697.1 39.8 2,318.2 29.8
Jumbo CDs >$100,000 637.0 10.6 254.0 14.5 891.1 11.5
IRAs 352.2 5.8 100.8 5.8 453.0 5.8
Total Interest Bearing $ 5,042.4 83.7 $ 1,522.6 86.9 $ 6,564.9 84.4
- ----------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $ 6,024.4 100.0% $ 1,751.5 100.0% $ 7,775.9 100.0%
</TABLE>
* Domestic deposit data only.
33
