EXHIBIT 99
For Immediate Release
July 13, 2000
For more information: Steven J. Goldstein
Chief Financial Officer
Centura Banks, Inc.
(252) 454-8356
[email protected]
CENTURA BANKS INC. REPORTS SECOND QUARTER EARNINGS OF $0.72 PER DILUTED SHARE,
BEFORE MERGER-RELATED AND OTHER SIGNIFICANT CHARGES
ROCKY MOUNT, N.C., July 13, 2000 - Centura Banks, Inc. (NYSE: CBC) today
announced second quarter 2000 earnings of $28.7 million, or $0.72 per diluted
share before merger-related and other significant charges. The second quarter
results include $5 million in additional loan loss provisions recorded in order
to align the credit risk management methodologies of Triangle Bancorp, Inc. with
those of Centura.
These results compare with net income of $0.88 per diluted share for the same
period a year ago and $0.90 for the first quarter of 2000. Results for the
year-ago periods have been restated to include combined results of Centura and
Triangle.
After pre-tax merger-related and other significant charges totaling $11.2
million, net income for the second quarter of 2000 totaled $20.9 million, or
$0.52 per diluted share. The $11.2 million in charges included $1.7 million
resulting from the Hannaford store closings and $7.1 million related to the
sales of certain investment securities incurred as a result of completing the
restructuring of the Triangle investment portfolio.
"Our disappointing performance in the second quarter was largely the result of
pressures on the net interest margin brought about by higher interest rates and
the slowing economy," said Cecil W. Sewell, chief executive officer. "Although
this economic condition impacts our entire industry, its effect has been
magnified on Centura due to the timing of our acquisition of Triangle. The
acquisition has progressed according to plan in terms of reduced expenses and
customer-retention goals, but we experienced additional margin pressures in the
second quarter as we both absorbed Triangle's portfolio and sacrificed some
retail pricing to our overriding priority of customer retention. Retaining our
high-value customers remains a top priority at Centura because it represents the
best long-term strategy for building lasting relationships, reducing the need
for wholesale funding, and strengthening the net interest margin."
<PAGE>
Including merger-related and other significant charges totaling $50.7 million,
net income was $29.0 million or $0.72 per diluted share for the six months
ending June 30, 2000. This compares to net income of $62.8 million or $1.55 per
diluted share for the first six months of 1999.
At June 30, 2000, nonperforming assets totaled $45.9 million, representing 0.60
% of total loans and foreclosed properties, consistent with the level each of
the last four years of approximately 0.55% to 0.65%.
About Centura
With assets of more than $11 billion and deposits exceeding $7 billion, Centura
Banks Inc. 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 is
provided through more than 250 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 the
bank's suite of Internet products and services. Additional information may be
found on Centura's Web site at www.centura.com.
This press release may contain various forward-looking statements.
These forward-looking statements involve risks and uncertainties and actual
results could differ from those described. A discussion of the various factors,
including factors beyond Centura's control, that could cause Centura's actual
results to differ materially from those expressed in such forward-looking
statements is included in Centura's filings with the Securities and Exchange
Commission.
<PAGE>
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
-------------------------------- ---------------------------------
(Dollars in thousands, except per share data) 2000 1999 Change 2000 1999 Change
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS
Interest income $ 217,718 $ 197,851 10.0% $ 433,150 $ 393,047 10.2%
Interest expense 114,202 94,061 21.4 224,826 187,971 19.6
------------------------------------------------------------------------------------------------------------------------
Net interest income 103,516 103,790 (0.3) 208,324 205,076 1.6
Provision for loan losses 11,920 8,347 42.8 17,895 15,928 12.3
Noninterest income 33,903 43,812 (22.6) 62,172 86,506 (28.1)
Noninterest expense 92,274 86,402 6.8 202,916 180,852 12.2
Income taxes 12,302 17,197 (28.5) 20,727 31,967 (35.2)
------------------------------------------------------------------------------------------------------------------------
Net income $ 20,923 $ 35,656 (41.3)% $ 28,958 $ 62,835 (53.9)%
========================================================================================================================
Net interest income, taxable equivalent $ 105,686 $ 106,810 (1.1)% $ 213,424 $ 210,900 1.2%
========================================================================================================================
PER COMMON SHARE
Earnings per share - basic $ 0.53 $ 0.90 (41.1)% $ 0.73 $ 1.58 (53.8)%
Earnings per share - diluted 0.52 0.88 (40.9) 0.72 1.55 (53.5)
Cash dividends paid 0.34 0.29 17.2 0.66 0.54 22.2
Book value per share 22.09 21.44 3.0 22.09 21.44 3.0
Closing market price 33.953 56.375 (39.8) 33.953 56.375 (39.8)
SELECTED FINANCIAL DATA (A)
Earnings per share - diluted $ 0.72 $ 0.88 (18.2)% $ 1.62 $ 1.72 (5.8)%
Return on average assets 1.04 1.30 (26)bp 1.16 1.29 (13)bp
Return on average equity 13.28 16.52 (324) 15.04 16.28 (124)
FINANCIAL RATIOS
Return on average assets 0.76 % 1.30 % (54)bp 0.52% 1.16% (64)bp
Return on average equity 9.68 16.52 (684) 6.73 14.69 (796)
Average equity to average assets 7.84 7.89 (5) 7.71 7.90 (19)
AVERAGE BALANCES
Assets $11,087,991 $10,972,828 1.0% $11,210,504 $10,920,665 2.7%
Earning assets, net 10,161,950 10,054,104 1.1 10,284,979 10,005,499 2.8
Loans, gross 7,604,252 7,231,015 5.2 7,542,782 7,177,489 5.1
Investment securities, net 2,456,812 2,671,440 (8.0) 2,615,445 2,666,107 (1.9)
Noninterest-bearing deposits 1,130,684 1,152,537 (1.9) 1,117,918 1,134,919 (1.5)
Core deposits 6,798,340 6,897,408 (1.4) 6,886,711 6,878,155 0.1
Total deposits 7,581,910 7,717,245 (1.8) 7,700,563 7,676,540 0.3
Interest-bearing liabilities 8,974,603 8,799,616 2.0 9,115,591 8,766,443 4.0
Shareholders' equity 869,319 865,538 0.4 864,707 862,315 0.3
PERIOD END BALANCES
Assets $11,338,832 $11,042,086 2.7% $11,338,832 $11,042,086 2.7%
Earning assets, net 10,366,538 10,118,726 2.4 10,366,538 10,118,726 2.4
Loans, gross 7,656,212 7,266,983 5.4 7,656,212 7,266,983 5.4
Investment securities, net 2,590,230 2,724,084 (4.9) 2,590,230 2,724,084 (4.9)
Noninterest-bearing deposits 1,195,965 1,220,468 (2.0) 1,195,965 1,220,468 (2.0)
Core deposits 6,972,050 6,894,351 1.1 6,972,050 6,894,351 1.1
Total deposits 7,748,104 7,785,416 (0.5) 7,748,104 7,785,416 (0.5)
Shareholders' equity 880,509 852,437 3.3 880,509 852,437 3.3
SELECTED BALANCES EXCLUDING DIVESTITURES (B)
Assets $11,080,175 $10,828,465 2.3% $11,163,869 $10,776,302 3.6%
Loans 7,597,238 7,098,810 7.0 7,502,030 7,045,284 6.5
Deposits 7,559,841 7,394,758 2.2 7,562,383 7,354,053 2.8
=========================================================================================================================
</TABLE>
bp- Change is measured as difference in basis points.
(A) Calculation excludes $11.2 million and $50.7 million of pre-tax
merger-related and other significant charges incurred for the three and
six months ended June 30, 2000, respectively. Included in these charges
are $22.1 million in losses related to sales of certain investment
securities incurred as a result of restructuring the investment portfolio
acquired with the Triangle merger, of which $15.1 million and $7.1
million were incurred during the first quarter and second quarter 2000,
respectively. 1999 excludes $8.4 million of pre-tax merger-related items,
all of which were incurred during the first quarter.
(B) Excludes average balances related to divested banking locations as a
result of the merger with Triangle Bancorp, Inc. Divestitures were
completed in April, 2000.
All prior period financial data has been restated for the February 18, 2000
merger with Triangle which was accounted for as a pooling-of-interests.
<PAGE>
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
------------------------------------ ------------------------------------
(Dollars in thousands) 2000 1999 Change 2000 1999 Change
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SHARES OUTSTANDING
Average basic 39,784,411 39,768,801 - % 39,691,391 39,784,247 (0.2)%
Average diluted 40,096,213 40,451,069 (0.9) 40,011,875 40,515,759 (1.2)
Outstanding at period end 39,859,195 39,754,091 0.3 39,859,195 39,754,091 0.3
COMPOSITION RATIOS (A)
Earning assets to total assets 91.65% 91.63% 2bp 91.74% 91.62% 12bp
Loans to earning assets 74.83 71.92 291 73.34 71.74 160
Interest-bearing liabilities to earning assets 88.32 87.52 80 88.63 87.62 101
Loans to total deposits 100.29 93.70 659 97.95 93.50 445
Noninterest-bearing deposits to total deposits 14.91 14.93 (2) 14.52 14.78 (26)
ALLOWANCE FOR LOAN LOSSES (AFLL)
Beginning balance $ 97,450 $ 93,821 3.9% $ 95,500 $ 91,894 3.9%
AFLL related to loans sold - (100) (100) - (100) (100)
Provision for loan losses 11,920 8,347 42.8 17,895 15,928 12.3
Allowance of acquired financial institutions - - - - 605 (100.0)
Charge-offs (7,450) (6,782) 9.8 (13,965) (14,008) (0.3)
Recoveries 1,351 839 61.0 3,841 1,806 112.7
------------------------------------------------------------------------------------------------------------------------------
Net charge-offs (6,099) (5,943) 2.6 (10,124) (12,202) (17.0)
------------------------------------------------------------------------------------------------------------------------------
Ending balance $ 103,271 $ 96,125 7.4% $ 103,271 $ 96,125 7.4%
==============================================================================================================================
Net charge-offs to average loans 0.32% 0.33% (1)bp 0.27% 0.34% (7)bp
COMPOSITION OF RISK ASSETS
Nonperforming loans $ 41,286 $ 59,573 (30.7)%
Foreclosed property 4,643 5,646 (17.8)
------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets $ 45,929 $ 65,219 (29.6)%
==============================================================================================================================
ASSET QUALITY RATIOS (B)
Nonperforming assets to:
Loans and foreclosed property 0.60% 0.90% (30)bp
Total assets 0.41 0.59 (18)
Nonperforming loans to total loans 0.54 0.82 (28)
Allowance for loan losses to total loans 1.35 1.32 3
Allowance for loan losses to nonperforming loans 2.50x 1.61 x 89
===============================================================================================================================
</TABLE>
bp- Change is measured as difference in basis points.
(A) Balance sheet amounts used in calculations are based on average balances.
(B) Balance sheet amounts used in calculations are based on period end
balances.
All prior period financial data has been restated for the February 18, 2000
merger with Triangle which was accounted for as a pooling-of-interests.
<PAGE>
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------------------------------------
As a Percent of
Average Assets (A)
-----------------
(Dollars in thousands) 2000 1999 Change 2000 1999
-----------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
<S> <C> <C> <C> <C> <C>
Service charges on deposit accounts $ 15,993 $ 15,930 0.4% 0.58% 0.58%
Credit card and related fees 2,050 1,933 6.1 0.07 0.07
Insurance and brokerage commissions 5,851 6,147 (4.8) 0.21 0.22
Other service charges, commissions and fees 3,274 3,678 (11.0) 0.12 0.13
Fees for trust services 2,758 2,743 0.6 0.10 0.10
Mortgage income 5,543 6,351 (12.7) 0.20 0.23
Negative goodwill amortization 335 335 - 0.01 0.01
Operating lease income, net 623 1,814 (65.7) 0.02 0.07
Other noninterest income 6,426 4,646 38.3 0.24 0.18
-----------------------------------------------------------------------------------------------------------
Noninterest income, excluding securities
transactions 42,853 43,577 (1.7) 1.55 1.59
Securities gains (losses), net (8,950) 235 NM (0.32) 0.01
-----------------------------------------------------------------------------------------------------------
Total noninterest income $ 33,903 $ 43,812 (22.6)% 1.23% 1.60%
===========================================================================================================
NONINTEREST EXPENSE
Salaries and overtime $ 35,435 $ 33,825 4.8% 1.29% 1.24%
Fringe benefits and other personnel costs 8,275 7,827 5.7 0.30 0.29
Occupancy 5,778 6,026 (4.1) 0.21 0.22
Equipment 5,881 7,284 (19.3) 0.21 0.27
Foreclosed real estate losses and related
operating expense 444 286 55.2 0.02 0.01
Marketing 2,362 2,531 (6.7) 0.09 0.09
Fees for outsourced services 4,991 4,452 12.1 0.18 0.16
Professional and legal fees 3,917 3,828 2.3 0.14 0.14
Other administrative 3,391 2,985 13.6 0.12 0.11
FDIC insurance 325 530 (38.7) 0.01 0.02
Deposit intangible and goodwill amortization 3,549 3,407 4.2 0.13 0.12
Office supplies, postage and telephone 6,317 6,455 (2.1) 0.23 0.24
Merger-related expenses and other
significant charges 4,178 - - 0.15 -
Other operating 7,431 6,966 6.7 0.27 0.25
-----------------------------------------------------------------------------------------------------------
Total noninterest expense $ 92,274 $ 86,402 6.8% 3.35% 3.16%
===========================================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin (B)(D) 31.80% 37.09% (529)bp
Efficiency ratio (C)(D) 60.07% 57.36% 271 bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.19% 8.57% 62 bp
Taxable securities 6.72 6.29 43
Tax-exempt securities 8.80 7.82 98
Short-term investments 6.59 6.88 (29)
-----------------------------------------------------------------------------------------------------------
Interest-earning assets 8.56 7.95 61
-----------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 4.67 3.99 68
Borrowed funds 5.93 4.59 134
Long-term debt 6.48 5.86 62
-----------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 5.09 4.27 82
-----------------------------------------------------------------------------------------------------------
Interest rate spread 3.47 3.68 (21)
Net interest margin 4.10 4.22 (12)
===========================================================================================================
<CAPTION>
Six Months Ended June 30,
----------------------------------------------------------
As a Percent of
Average Assets (A)
--------------------
(Dollars in thousands) 2000 1999 Change 2000 1999
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NONINTEREST INCOME
Service charges on deposit accounts $ 31,348 $ 30,924 1.4% 0.56% 0.57%
Credit card and related fees 4,121 3,857 6.8 0.07 0.07
Insurance and brokerage commissions 13,018 12,448 4.6 0.23 0.23
Other service charges, commissions and fees 6,919 6,766 2.3 0.12 0.12
Fees for trust services 5,509 5,182 6.3 0.10 0.10
Mortgage income 9,248 14,102 (34.4) 0.17 0.26
Negative goodwill amortization 669 669 - 0.01 0.01
Operating lease income, net 1,322 3,628 (63.6) 0.02 0.07
Other noninterest income 13,823 7,920 74.5 0.26 0.15
-----------------------------------------------------------------------------------------------------------
Noninterest income, excluding securities
transactions 85,977 85,496 0.6 1.54 1.58
Securities gains (losses), net (23,805) 1,010 NM (0.42) 0.02
-----------------------------------------------------------------------------------------------------------
Total noninterest income $ 62,172 $ 86,506 (28.1)% 1.12% 1.60%
===========================================================================================================
NONINTEREST EXPENSE
Salaries and overtime $ 71,053 $ 69,970 1.6% 1.27% 1.29%
Fringe benefits and other personnel costs 16,423 16,208 1.3 0.29 0.30
Occupancy 12,231 12,341 (0.9) 0.22 0.23
Equipment 12,029 14,071 (14.5) 0.22 0.26
Foreclosed real estate losses and related
operating expense 1,106 723 53.0 0.02 0.01
Marketing 3,841 4,828 (20.4) 0.07 0.09
Fees for outsourced services 9,360 8,411 11.3 0.17 0.16
Professional and legal fees 7,001 7,323 (4.4) 0.13 0.14
Other administrative 6,361 5,783 10.0 0.11 0.11
FDIC insurance 763 941 (18.9) 0.01 0.02
Deposit intangible and goodwill amortization 6,702 6,757 (0.8) 0.12 0.12
Office supplies, postage and telephone 12,690 12,441 2.0 0.23 0.23
Merger-related expenses and other
significant charges 28,516 6,858 - 0.51 0.13
Other operating 14,840 14,197 4.5 0.27 0.25
-----------------------------------------------------------------------------------------------------------
Total noninterest expense $ 202,916 $ 180,852 12.2% 3.64% 3.34%
===========================================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin (B)(D) 35.41% 36.64% (123)bp
Efficiency ratio (C)(D) 58.58% 58.50% 8 bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.07% 8.60% 47 bp
Taxable securities 6.67 6.26 41
Tax-exempt securities 8.04 7.92 12
Short-term investments 6.76 7.32 (56)
-----------------------------------------------------------------------------------------------------------
Interest-earning assets 8.43 7.97 46
-----------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 4.53 4.03 50
Borrowed funds 5.86 4.73 113
Long-term debt 6.18 5.78 40
-----------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 4.93 4.31 62
-----------------------------------------------------------------------------------------------------------
Interest rate spread 3.50 3.66 (16)
Net interest margin 4.08 4.20 (12)
===========================================================================================================
</TABLE>
bp- Change is measured as difference in basis points.
(A) Data presented is annualized.
(B) Sum of income before taxes plus the taxable equivalent adjustment divided
by the sum of taxable equivalent net interest income plus noninterest income.
(C) Noninterest expense divided by sum of taxable equivalent net interest
income plus noninterest income.
(D) Calculation excludes merger-related and other significant charges.
All prior period financial data has been restated for the February 18, 2000
merger with Triangle which was accounted for as a pooling-of-interests.
<PAGE>
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
2000 1999
-------------------------- -------------------------------------- 2nd Qtr 00
Second First Fourth Third Second vs.
(Dollars in thousands, except per share data) Quarter Quarter Quarter Quarter Quarter 1st Qtr 00
---------------------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FINANCIAL SUMMARY (A)
Assets $11,087,991 $1,333,016 $11,244,033 $11,065,694 $10,972,828 (2.2)%
Earning assets, net 10,161,950 0,408,008 10,311,262 10,164,652 10,054,104 (2.4)
Loans, gross 7,604,252 7,481,313 7,363,250 7,305,302 7,231,015 1.6
Investment securities, net 2,456,812 2,774,077 2,820,815 2,722,460 2,671,440 (11.4)
Total deposits 7,581,910 7,819,217 7,864,788 7,770,777 7,717,245 (3.0)
Interest-bearing liabilities 8,974,603 9,256,578 9,066,703 8,897,333 8,799,616 (3.0)
Shareholders' equity 869,319 860,095 861,593 869,562 865,538 1.1
Total market capitalization (period end) 1,353,339 1,817,042 1,742,779 1,649,174 2,241,137 (25.5)
Net income 20,923 8,035 35,549 31,953 35,656 160.4
PROFITABILITY/PERFORMANCE SUMMARY(A)
Pretax operating profit margin(B) 31.80% 38.92% 38.07% 33.11% 37.09% (712)bp
Efficiency ratio(B) 60.07 57.12 55.94 56.65 57.36 295
Net interest margin 4.10 4.07 4.20 4.27 4.22 3
Return on average assets 0.76 0.29 1.25 1.15 1.30 47
Return on average equity 9.68 3.76 16.37 14.58 16.52 592
Average equity to average assets 7.84 7.59 7.66 7.86 7.89 25
PER SHARE SUMMARY
Earnings per share - basic $ 0.53 $ 0.20 $ 0.90 $ 0.80 $ 0.90 165.0 %
Earnings per share - diluted 0.52 0.20 0.89 0.79 0.88 160.0
Cash dividends paid 0.34 0.32 0.30 0.29 0.29 6.3
Book value per share 22.09 21.72 21.77 21.74 21.44 1.7
Closing market price 33.953 45.813 44.125 41.375 56.375 (25.9)
KEY INTANGIBLE ASSETS (C)
Goodwill $ 125,606 $ 131,514 $ 134,851 $ 138,334 $ 141,332 (4.5)%
Mortgage servicing rights 31,797 35,076 35,916 36,979 42,993 (9.3)
ASSET QUALITY SUMMARY(C)
Nonperforming assets $ 45,929 $ 37,161 $ 35,836 $ 46,871 $ 65,219 23.6%
Allowance for loan losses 103,271 97,450 95,500 93,701 96,125 6.0
Nonperforming assets to total assets 0.41% 0.33% 0.31% 0.42% 0.59% 8 bp
Allowance for loan losses to total loans 1.35 1.29 1.28 1.28 1.32 6
Net charge-offs to average loans 0.32 0.22 0.38 0.98 0.33 10
==========================================================================================================================
</TABLE>
bp- Change is measured as difference in basis points.
(A) Balance sheet amounts are based on average balances unless otherwise noted.
(B) Calculation excludes merger-related and other significant charges.
(C) Balance sheet amounts are based on period end balances unless otherwise
noted.
All prior period financial data has been restated for the February 18, 2000
merger with Triangle which was accounted for as a pooling-of-interests.
