Centura Banks, Inc. Reports First-Quarter Net Income Of $0.89 Per Diluted Share

Apr 12, 2001, 01:00 ET from Centura Banks, Inc.

    ROCKY MOUNT, N.C., April 12 /PRNewswire/ -- Centura Banks Inc. (NYSE:   CBC)
 today announced first-quarter net earnings of $35.5 million, or $0.89 per
 diluted share.  This compares with $35.8 million, or $0.90 cents per diluted
 share, for the fourth quarter of 2000, and $36.0 million, or $0.90 cents per
 diluted share, excluding merger-related charges, for the same period a year
 ago.
     "Centura continued to perform in line with our expectations during the
 first quarter," said Cecil W. Sewell, chief executive officer.  "Our overall
 performance was consistent and encouraging, despite the slowdown in the
 economy and the deterioration in consumer confidence that continued to impact
 our industry.  Annualized commercial loan growth was on target for the quarter
 and core deposits exhibited growth in the last two months of the period."
     Noninterest income for the first quarter rose to $45.1 million from
 $43.3 million in the fourth quarter.  Business units exhibiting growth during
 the period included commercial mortgage, residential mortgage and insurance.
 The increase also included a gain of $2.8 million that resulted from the sale
 of a private company in which Centura holds an interest.  As expected,
 performance in the company's brokerage division was affected by the declining
 stock market and slowing economy while deposit fees were also down as compared
 to fourth quarter in response to seasonal factors.
     Centura's first-quarter net interest margin was 4.07 percent, compared
 with 4.14 percent in the fourth quarter.  The decline was due to Centura's
 decision to increase its investment portfolio, which increased on average
 12 percent over the fourth quarter, as a means of managing capital in the
 absence of share repurchases.  Centura was precluded from repurchasing its own
 stock as part of its Jan. 26, 2001, agreement to be acquired by Royal Bank of
 Canada (NYSE, TY: RY).  Centura's board of directors officially rescinded the
 1.5-million-share repurchase program late in the first quarter of 2001
 subsequent to the merger announcement.  Under the program announced in
 September 2000, the company repurchased approximately 552,000 shares but has
 not been active in the market since December.
     Addressing first-quarter credit quality, Sewell said:  "Centura's asset
 quality remains solid, despite the weakened economic environment that has
 resulted in a general industry-wide increase in nonperforming assets.  The
 overall quality of our loan portfolio remains strong, and our allowance for
 loan losses is fully adequate at 1.35 percent of total loans at the end of the
 period.  Net charge offs, at 0.35 percent of average loans, were in line with
 our expectations for the quarter.
     "As we move forward in 2001, we will continue to focus on retaining and
 expanding our relationship with Centura's most valuable customers," Sewell
 said.  "Our combination with Royal Bank of Canada will better position Centura
 to provide our customers with the high level of personalized service they have
 come to expect from us, with the added resources available through Royal Bank
 of Canada.  We are very excited about the potential this combination affords
 Centura's customers, employees and shareholders."
     Centura's definitive agreement to be acquired by Royal Bank of Canada
 requires that each Centura share will be exchanged for 1.684 shares of Royal
 Bank.  The transaction remains subject to regulatory approvals and shareholder
 vote.  It is expected to close by mid-summer.
 
     About Centura
     Centura Banks Inc., a $12 billion-asset financial services company based
 in North Carolina, 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 240 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 website at www.centura.com .
 
     Safe Harbor
     Statements made in this press release, other than those containing
 historical information, are forward-looking statements made pursuant to the
 safe-harbor provisions of the Private Securities Litigation Act of 1995.
 These include statements about Centura, including descriptions of goals,
 expectations, projections, estimates, intentions, plans and objectives of its
 management for future operations, products or services, and forecasts of its
 revenues, earnings or other measures of economic performance.  One can
 identify these forward-looking statements by the use of words such as
 "expects," "plans," "believes," "will," "estimates," "intends," "projects,"
 "goals," and other words of similar meaning.  One can identify them by the
 fact that they do not strictly relate to historical or current facts.  Such
 statements reflect current views, but are based on assumptions and involve
 significant risks and uncertainties and are subject to change based on various
 factors, many of which are beyond Centura's control.  Those factors include,
 but are not limited to, the following: (i) customer and deposit attrition, or
 revenue loss, following completed mergers may be greater than expected; (ii)
 competitive pressure in the banking industry may increase significantly; (iii)
 changes in the interest rate environment may reduce margins; (iv) general
 economic conditions, either nationally or regionally, may be less favorable
 than expected, resulting in, among other things, credit quality deterioration
 and the possible impairment of collectibility of loans; (v) the impact of
 changes in monetary and fiscal policies, laws, rules and regulations; (vi) the
 impact of the Gramm-Leach-Bliley Act of 1999; (vii) changes in business
 conditions and inflation; (viii) the impact to revenue and expenses in the
 event that announced mergers do not consummate as anticipated; and (ix) other
 risks and factors identified in Centura's filings with the Securities and
 Exchange Commission and other regulatory bodies.
 
     FINANCIAL HIGHLIGHTS
     CENTURA BANKS, INC. AND SUBSIDIARIES
                                           Three Months Ended March 31,
     (Dollars in thousands,
      except per share data)             2001           2000           Change
 
     EARNINGS
      Interest income                $226,260        $215,432           5.0 %
 
      Interest expense                118,995         110,624           7.6
      Net interest income             107,265         104,808           2.3
      Provision for loan losses         7,170           5,975          20.0
      Noninterest income               45,115          28,269          59.6
      Noninterest expense              90,982         110,642         (17.8)
      Income taxes                     18,707           8,425         122.0
      Net income                      $35,521          $8,035         342.1 %
      Net interest income, taxable
       equivalent                    $109,847        $107,738           2.0 %
 
     PER COMMON SHARE
      Earnings per share - basic       $ 0.90          $ 0.20         350.0 %
      Earnings per share - diluted       0.89            0.20         345.0
      Cash dividends paid                0.34            0.32          12.5
      Book value per share              25.00           21.72          15.1
      Closing market price             49.450          45.813           7.9
 
     SELECTED FINANCIAL DATA (A)
      Earnings per share - diluted      $0.89           $0.90          (1.1) %
      Return on average assets           1.22 %          1.28            (6)bp
      Return on average equity          14.63           16.81          (218)
 
     FINANCIAL RATIOS
      Return on average assets           1.22 %          0.29 %          93 bp
      Return on average equity          14.63            3.76         1,087
      Average equity to average assets   8.37            7.59            78
 
     AVERAGE BALANCES
      Assets                     $ 11,764,869    $ 11,333,016           3.8 %
      Earning assets, net          10,805,374      10,408,008           3.8
      Loans, gross                  7,721,247       7,481,313           3.2
      Investment securities, net    2,981,039       2,774,077           7.5
      Unrealized gains(losses) on
       available-for-sale securities   51,671         (74,441)        169.4
      Noninterest-bearing deposits  1,063,523       1,105,151          (3.8)
      Core deposits                 6,832,345       6,975,082          (2.0)
      Total deposits                7,484,106       7,819,217          (4.3)
      Interest-bearing liabilities  9,528,849       9,256,578           2.9
      Shareholders' equity            984,483         860,095          14.5
 
     PERIOD END BALANCES
      Assets                     $ 11,926,388    $ 11,206,613           6.4 %
      Earning assets, net          10,952,384      10,256,509           6.8
      Loans, gross                  7,748,130       7,565,897           2.4
      Investment securities, net    3,078,052       2,607,341          18.1
      Unrealized gains(losses) on
       available-for-sale securities   66,878          64,592           3.5
      Noninterest-bearing deposits  1,116,991       1,174,585          (4.9)
      Core deposits                 6,882,011       6,956,145          (1.1)
      Total deposits                7,542,161       7,752,991          (2.7)
      Shareholders' equity            990,834         861,381          15.0
 
     bp - Change is measured as difference in basis points.
    (A) Calculation excludes $39.4 million of merger-related and other
        significant charges for 2000.  Included in the merger-related and
        other significant charges for 2000 were $15.1 million in losses
        related to sales of certain investment securities incurred as a result
        of restructuring the investment portfolio acquired with the Triangle
        merger.
 
 
     OTHER FINANCIAL DATA
     CENTURA BANKS, INC. AND SUBSIDIARIES
 
                                          Three Months Ended March 31,
     (Dollars in thousands)          2001            2000            Change
     SHARES OUTSTANDING
      Average basic                39,556,008      39,598,371         (0.1) %
      Average diluted              40,027,011      39,926,443          0.3
      Outstanding at period end    39,633,208      39,662,141         (0.1)
 
     COMPOSITION RATIOS (A)
      Earning assets to total assets    91.84 %         91.84 %          1 bp
      Loans to earning assets           71.46           71.88          (42)
      Interest-bearing liabilities to
       earning assets                   88.19           88.94          (75)
      Loans to total deposits          103.17           95.68          749
 
      Noninterest-bearing deposits to
        total deposits                  14.21           14.13            8
 
     ALLOWANCE FOR LOAN LOSSES (AFLL)
      Beginning balance              $104,275         $95,500          9.2 %
      Provision for loan losses         7,170           5,975         20.0
      Charge-offs                      (8,414)         (6,515)        29.1
      Recoveries                        1,674           2,490        (32.8)
       Net charge-offs                 (6,740)         (4,025)        67.5
      Ending balance                 $104,705         $97,450          7.4 %
 
 
   Net charge-offs to average loans     0.35 %           0.22 %         13 bp
     COMPOSITION OF RISK ASSETS
      Nonperforming loans (C)        $51,301          $32,372         58.5 %
      Foreclosed property              7,240            4,789         51.2
      Nonperforming assets           $58,541          $37,161         57.5 %
 
      Loans 90+ days past due,
       still accruing                $18,451          $11,887         55.2 %
 
     ASSET QUALITY RATIOS (B) (C)
      Nonperforming assets (NPAs) to:
       Loans and foreclosed property    0.75 %           0.49 %         26 bp
       Total assets                     0.49             0.33           16
      Nonperforming loans (NPLs) to
       total loans                      0.66             0.43           23
      Allowance for loan losses to
       total loans                      1.35             1.29            6
      Allowance for loan losses to
       nonperforming loans              2.04 x           3.01 x        (97)
 
     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.
    (C) Excludes $4.8 million of NPLs classified as held for accelerated
        disposition at March 31, 2001.
        Including these NPLs, NPAs to loans and foreclosed property were
        0.81%, NPAs to total assets were 0.53%, NPLs to total loans were
        0.72%, and the AFLL to NPLs was 1.88x.
 
     OTHER FINANCIAL DATA, continued
     CENTURA BANKS, INC. AND SUBSIDIARIES
 
                                 Three Months Ended March 31,
                                                         As a Percent of
                                                        Average Assets (A)
      (Dollars in           2001      2000    Change       2001       2000
       thousands)
     NONINTEREST INCOME
     Service charges on
      deposit accounts  $15,295  $15,355       (0.4) %    0.53 %    0.55 %
     Credit card and
      related fees        2,124    2,071        2.6       0.07      0.07
     Insurance and
      brokerage
      commissions         6,232    7,167      (13.0)      0.22      0.25
     Other service
      charges, commissions
      and fees            3,081    3,645      (15.5)      0.11      0.13
     Fees for trust
      services            2,665    2,751       (3.1)      0.09      0.10
     Mortgage income      5,463    3,705       47.4       0.19      0.13
     Negative goodwill
      amortization          334      334         --       0.01      0.01
     Operating lease
      income, net           414      699      (40.8)      0.01      0.03
     Other noninterest
      income              8,757    7,397       18.4       0.30      0.26
     Noninterest income,
      excluding securities
      transactions       44,365   43,124        2.9       1.53      1.53
     Securities gains
      (losses), net         750      220      240.9       0.03      0.01
     Securities gains (losses),
      net - merger
      related                --  (15,075)    (100.0)        --     (0.54)
     Total noninterest
      income            $45,115  $28,269       59.6 %     1.56 %    1.00 %
 
     NONINTEREST EXPENSE
     Salaries and
      overtime          $37,452  $35,618        5.1 %     1.29 %    1.26 %
     Fringe benefits and
      other personnel
      costs              10,484    8,148       28.7       0.36      0.29
     Occupancy            6,367    6,453       (1.3)      0.22      0.23
     Equipment            6,754    6,148        9.9       0.23      0.22
     Foreclosed real estate
      losses and related
      operating expense     605      662       (8.6)      0.02      0.02
     Marketing            2,450    1,479       65.7       0.08      0.05
     Fees for outsourced
      services            5,576    4,369       27.6       0.19      0.16
     Professional and
      legal fees          4,245    3,084       37.6       0.15      0.11
     Other administrative 3,071    2,970        3.4       0.11      0.11
     FDIC insurance         365      438      (16.7)      0.01      0.02
     Deposit intangible and
      goodwill
      amortization        4,132    3,153       31.1       0.14      0.11
     Office supplies, postage
      and telephone       6,474    6,373        1.6       0.22      0.23
     Other operating      3,325    7,409      (55.1)      0.13      0.25
     Total NIE before
      merger-related and
      other significant
      charges            91,300   86,304        5.8       3.15      3.06
     Merger-related expenses
      and other significant
      charges              (318)  24,338     (101.3)     (0.01)     0.87
     Total noninterest
      expense           $90,982 $110,642      (17.8) %    3.14 %    3.93 %
 
     OTHER PERFORMANCE RATIOS
     Pretax operating profit
      margin (B)(D)       36.46 %  38.92 %     (246) bp
     Efficiency ratio
      (C)(D)              58.92    57.12        179
     Net interest income
      analysis-taxable
      equivalent:
      Selected average
       yields/rates:
        Loans              9.04 %   8.94 %       10  bp
        Taxable securities 7.22     6.63         59
        Tax-exempt
         securities        8.69     7.75         94
        Short-term
         investments       5.54     5.18         36
        Mortgage loans
         held-for-sale     8.00     9.05       (105)
        Interest-earning
         assets            8.53     8.29         24
        Total interest-bearing
         deposits          4.72     4.39         33
        Borrowed funds     5.42     5.68        (26)
        Long-term debt     6.17     6.06         11
        Total interest-bearing
         liabilities       5.70     4.78         92
         Interest rate
          spread           2.83     3.51        (68)
        Net interest
         margin            4.07     4.07         --
 
 
     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 the sum of taxable equivalent net
          interest income plus noninterest income.
     (D)  Calculation excludes merger-related and other significant charges.
 
 
     QUARTERLY FINANCIAL TRENDS
     CENTURA BANKS, INC. AND SUBSIDIARIES
 
                    2001                          2000
                   First       Fourth       Third       Second       First
                  Quarter      Quarter     Quarter     Quarter      Quarter
 
     (Dollars in thousands,
     except per share data)
 
     FINANCIAL SUMMARY (A)
      Assets  $11,764,869  $11,405,683  $11,261,701  $11,087,991 $11,333,016
      Earning
       assets,
       net     10,805,374   10,466,489   10,323,647   10,161,950  10,408,008
      Loans,
       gross    7,721,247    7,713,182    7,631,191    7,604,252   7,481,313
      Investment
       securities,
       net      2,981,039    2,655,105    2,599,384    2,456,812   2,774,077
      Total
       deposits 7,484,106    7,655,687    7,584,598    7,581,910   7,819,217
      Interest-
       bearing
       liabili-
       ties     9,528,849    9,225,498    9,114,564    8,974,603   9,256,578
      Shareholders'
       equity     984,483      926,344      902,196      869,319     860,095
      Total market
       capitalization
       (period
       end)     1,959,862    1,902,355    1,527,838    1,353,339   1,817,042
      Net
       income      35,521       35,794       34,003       20,923       8,035
      Full-time
       equivalents  3,327        3,379        3,443        3,450       3,450
 
     PROFITABILITY/PERFORMANCE SUMMARY(A)
      Pretax operating
       profit margin
       (B)          36.46%       36.23%       37.10%       31.80%      38.92%
      Efficiency
       ratio(B)     58.92        59.23        58.16        60.07       57.12
      Net interest
       margin        4.07         4.14         4.06         4.10        4.07
      Return on average
       assets        1.22         1.25         1.20         0.76        0.29
      Return on
       average
       equity       14.63        15.37        15.00         9.68        3.76
      Average equity
       to average
       assets        8.37         8.12         8.01         7.84        7.59
 
     PER SHARE SUMMARY
      Earnings per
       share -
        basic      $ 0.90       $ 0.91      $  0.85      $  0.53     $  0.20
      Earnings per
       share -
        diluted      0.89         0.90         0.85         0.52        0.20
      Cash dividends
       paid          0.34         0.34         0.34         0.34        0.32
      Book value per
       share        25.00        24.26        23.05        22.09       21.72
      Closing market
       price       49.450       48.250       38.313       33.953      45.813
 
     KEY INTANGIBLE ASSETS (C)
      Goodwill   $136,158     $139,928     $143,520     $125,606    $131,514
      Mortgage
       servicing
       rights       6,779        6,517        6,037       31,797      35,076
 
     ASSET QUALITY SUMMARY(C)
      Nonperforming assets
       (NPAs)(D)  $58,541      $54,372      $54,631      $45,929     $37,161
      Allowance for
       loan
       losses     104,705      104,275      104,036      103,271      97,450
      Nonperforming
       assets to total
       assets (D)    0.49 %       0.47 %       0.48 %       0.41 %      0.33 %
      Allowance for
       loan losses to
       total loans   1.35         1.36         1.35         1.35        1.29
      Net charge-offs
       to average
       loans         0.35         0.33         0.32         0.32        0.22
 
 
                                                    1st Qtr 01
                                                         vs.
                                                     4th Qtr 00
 
     (Dollars in thousands,
     except per share data)
 
     FINANCIAL SUMMARY (A)
      Assets                                           3.1  %
      Earning assets, net                              3.2
      Loans, gross                                     0.1
      Investment securities, net                      12.3
      Total deposits                                  (2.2)
 
     Interest-bearing liabilities                      3.3
     Shareholders' equity                              6.3
 
     Total market capitalization (period end)          3.0
     Net income                                       (0.8)
 
     Full-time equivalents                            (1.5)
 
 
     PROFITABILITY/PERFORMANCE SUMMARY(A)
     Pretax operating profit margin(B)                  23 bp
     Efficiency ratio(B)                               (31)
     Net interest margin                                (7)
     Return on average assets                           (2)
     Return on average equity                          (74)
     Average equity to average assets                   25
 
     PER SHARE SUMMARY
     Earnings per share - basic                       (1.1) %
     Earnings per share - diluted                     (1.1)
     Cash dividends paid                               5.9
     Book value per share                              3.1
     Closing market price                              2.5
 
     KEY INTANGIBLE ASSETS (C)
     Goodwill                                         (2.7) %
     Mortgage servicing rights                         4.0
 
     ASSET QUALITY SUMMARY(C)
     Nonperforming assets (NPA's)(D)                   7.7 %
     Allowance for loan losses                         0.4
     Nonperforming assets to total assets (D)            2 bp
     Allowance for loan losses to total loans           (1)
     Net charge-offs to average loans                    2
 
 
     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.
     (D) Excludes $4.8 million and $6.0 million of nonperforming loans (NPLs)
         classified as held for accelerated disposition at March 31, 2001 and
         December 31, 2000, respectively.  Including these NPLs, NPAs to total
         assets were 0.53% and 0.51% for the quarters ended March 31, 2001 and
         December 31, 2000, respectively.
 
 

SOURCE Centura Banks, Inc.
    ROCKY MOUNT, N.C., April 12 /PRNewswire/ -- Centura Banks Inc. (NYSE:   CBC)
 today announced first-quarter net earnings of $35.5 million, or $0.89 per
 diluted share.  This compares with $35.8 million, or $0.90 cents per diluted
 share, for the fourth quarter of 2000, and $36.0 million, or $0.90 cents per
 diluted share, excluding merger-related charges, for the same period a year
 ago.
     "Centura continued to perform in line with our expectations during the
 first quarter," said Cecil W. Sewell, chief executive officer.  "Our overall
 performance was consistent and encouraging, despite the slowdown in the
 economy and the deterioration in consumer confidence that continued to impact
 our industry.  Annualized commercial loan growth was on target for the quarter
 and core deposits exhibited growth in the last two months of the period."
     Noninterest income for the first quarter rose to $45.1 million from
 $43.3 million in the fourth quarter.  Business units exhibiting growth during
 the period included commercial mortgage, residential mortgage and insurance.
 The increase also included a gain of $2.8 million that resulted from the sale
 of a private company in which Centura holds an interest.  As expected,
 performance in the company's brokerage division was affected by the declining
 stock market and slowing economy while deposit fees were also down as compared
 to fourth quarter in response to seasonal factors.
     Centura's first-quarter net interest margin was 4.07 percent, compared
 with 4.14 percent in the fourth quarter.  The decline was due to Centura's
 decision to increase its investment portfolio, which increased on average
 12 percent over the fourth quarter, as a means of managing capital in the
 absence of share repurchases.  Centura was precluded from repurchasing its own
 stock as part of its Jan. 26, 2001, agreement to be acquired by Royal Bank of
 Canada (NYSE, TY: RY).  Centura's board of directors officially rescinded the
 1.5-million-share repurchase program late in the first quarter of 2001
 subsequent to the merger announcement.  Under the program announced in
 September 2000, the company repurchased approximately 552,000 shares but has
 not been active in the market since December.
     Addressing first-quarter credit quality, Sewell said:  "Centura's asset
 quality remains solid, despite the weakened economic environment that has
 resulted in a general industry-wide increase in nonperforming assets.  The
 overall quality of our loan portfolio remains strong, and our allowance for
 loan losses is fully adequate at 1.35 percent of total loans at the end of the
 period.  Net charge offs, at 0.35 percent of average loans, were in line with
 our expectations for the quarter.
     "As we move forward in 2001, we will continue to focus on retaining and
 expanding our relationship with Centura's most valuable customers," Sewell
 said.  "Our combination with Royal Bank of Canada will better position Centura
 to provide our customers with the high level of personalized service they have
 come to expect from us, with the added resources available through Royal Bank
 of Canada.  We are very excited about the potential this combination affords
 Centura's customers, employees and shareholders."
     Centura's definitive agreement to be acquired by Royal Bank of Canada
 requires that each Centura share will be exchanged for 1.684 shares of Royal
 Bank.  The transaction remains subject to regulatory approvals and shareholder
 vote.  It is expected to close by mid-summer.
 
     About Centura
     Centura Banks Inc., a $12 billion-asset financial services company based
 in North Carolina, 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 240 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 website at www.centura.com .
 
     Safe Harbor
     Statements made in this press release, other than those containing
 historical information, are forward-looking statements made pursuant to the
 safe-harbor provisions of the Private Securities Litigation Act of 1995.
 These include statements about Centura, including descriptions of goals,
 expectations, projections, estimates, intentions, plans and objectives of its
 management for future operations, products or services, and forecasts of its
 revenues, earnings or other measures of economic performance.  One can
 identify these forward-looking statements by the use of words such as
 "expects," "plans," "believes," "will," "estimates," "intends," "projects,"
 "goals," and other words of similar meaning.  One can identify them by the
 fact that they do not strictly relate to historical or current facts.  Such
 statements reflect current views, but are based on assumptions and involve
 significant risks and uncertainties and are subject to change based on various
 factors, many of which are beyond Centura's control.  Those factors include,
 but are not limited to, the following: (i) customer and deposit attrition, or
 revenue loss, following completed mergers may be greater than expected; (ii)
 competitive pressure in the banking industry may increase significantly; (iii)
 changes in the interest rate environment may reduce margins; (iv) general
 economic conditions, either nationally or regionally, may be less favorable
 than expected, resulting in, among other things, credit quality deterioration
 and the possible impairment of collectibility of loans; (v) the impact of
 changes in monetary and fiscal policies, laws, rules and regulations; (vi) the
 impact of the Gramm-Leach-Bliley Act of 1999; (vii) changes in business
 conditions and inflation; (viii) the impact to revenue and expenses in the
 event that announced mergers do not consummate as anticipated; and (ix) other
 risks and factors identified in Centura's filings with the Securities and
 Exchange Commission and other regulatory bodies.
 
     FINANCIAL HIGHLIGHTS
     CENTURA BANKS, INC. AND SUBSIDIARIES
                                           Three Months Ended March 31,
     (Dollars in thousands,
      except per share data)             2001           2000           Change
 
     EARNINGS
      Interest income                $226,260        $215,432           5.0 %
 
      Interest expense                118,995         110,624           7.6
      Net interest income             107,265         104,808           2.3
      Provision for loan losses         7,170           5,975          20.0
      Noninterest income               45,115          28,269          59.6
      Noninterest expense              90,982         110,642         (17.8)
      Income taxes                     18,707           8,425         122.0
      Net income                      $35,521          $8,035         342.1 %
      Net interest income, taxable
       equivalent                    $109,847        $107,738           2.0 %
 
     PER COMMON SHARE
      Earnings per share - basic       $ 0.90          $ 0.20         350.0 %
      Earnings per share - diluted       0.89            0.20         345.0
      Cash dividends paid                0.34            0.32          12.5
      Book value per share              25.00           21.72          15.1
      Closing market price             49.450          45.813           7.9
 
     SELECTED FINANCIAL DATA (A)
      Earnings per share - diluted      $0.89           $0.90          (1.1) %
      Return on average assets           1.22 %          1.28            (6)bp
      Return on average equity          14.63           16.81          (218)
 
     FINANCIAL RATIOS
      Return on average assets           1.22 %          0.29 %          93 bp
      Return on average equity          14.63            3.76         1,087
      Average equity to average assets   8.37            7.59            78
 
     AVERAGE BALANCES
      Assets                     $ 11,764,869    $ 11,333,016           3.8 %
      Earning assets, net          10,805,374      10,408,008           3.8
      Loans, gross                  7,721,247       7,481,313           3.2
      Investment securities, net    2,981,039       2,774,077           7.5
      Unrealized gains(losses) on
       available-for-sale securities   51,671         (74,441)        169.4
      Noninterest-bearing deposits  1,063,523       1,105,151          (3.8)
      Core deposits                 6,832,345       6,975,082          (2.0)
      Total deposits                7,484,106       7,819,217          (4.3)
      Interest-bearing liabilities  9,528,849       9,256,578           2.9
      Shareholders' equity            984,483         860,095          14.5
 
     PERIOD END BALANCES
      Assets                     $ 11,926,388    $ 11,206,613           6.4 %
      Earning assets, net          10,952,384      10,256,509           6.8
      Loans, gross                  7,748,130       7,565,897           2.4
      Investment securities, net    3,078,052       2,607,341          18.1
      Unrealized gains(losses) on
       available-for-sale securities   66,878          64,592           3.5
      Noninterest-bearing deposits  1,116,991       1,174,585          (4.9)
      Core deposits                 6,882,011       6,956,145          (1.1)
      Total deposits                7,542,161       7,752,991          (2.7)
      Shareholders' equity            990,834         861,381          15.0
 
     bp - Change is measured as difference in basis points.
    (A) Calculation excludes $39.4 million of merger-related and other
        significant charges for 2000.  Included in the merger-related and
        other significant charges for 2000 were $15.1 million in losses
        related to sales of certain investment securities incurred as a result
        of restructuring the investment portfolio acquired with the Triangle
        merger.
 
 
     OTHER FINANCIAL DATA
     CENTURA BANKS, INC. AND SUBSIDIARIES
 
                                          Three Months Ended March 31,
     (Dollars in thousands)          2001            2000            Change
     SHARES OUTSTANDING
      Average basic                39,556,008      39,598,371         (0.1) %
      Average diluted              40,027,011      39,926,443          0.3
      Outstanding at period end    39,633,208      39,662,141         (0.1)
 
     COMPOSITION RATIOS (A)
      Earning assets to total assets    91.84 %         91.84 %          1 bp
      Loans to earning assets           71.46           71.88          (42)
      Interest-bearing liabilities to
       earning assets                   88.19           88.94          (75)
      Loans to total deposits          103.17           95.68          749
 
      Noninterest-bearing deposits to
        total deposits                  14.21           14.13            8
 
     ALLOWANCE FOR LOAN LOSSES (AFLL)
      Beginning balance              $104,275         $95,500          9.2 %
      Provision for loan losses         7,170           5,975         20.0
      Charge-offs                      (8,414)         (6,515)        29.1
      Recoveries                        1,674           2,490        (32.8)
       Net charge-offs                 (6,740)         (4,025)        67.5
      Ending balance                 $104,705         $97,450          7.4 %
 
 
   Net charge-offs to average loans     0.35 %           0.22 %         13 bp
     COMPOSITION OF RISK ASSETS
      Nonperforming loans (C)        $51,301          $32,372         58.5 %
      Foreclosed property              7,240            4,789         51.2
      Nonperforming assets           $58,541          $37,161         57.5 %
 
      Loans 90+ days past due,
       still accruing                $18,451          $11,887         55.2 %
 
     ASSET QUALITY RATIOS (B) (C)
      Nonperforming assets (NPAs) to:
       Loans and foreclosed property    0.75 %           0.49 %         26 bp
       Total assets                     0.49             0.33           16
      Nonperforming loans (NPLs) to
       total loans                      0.66             0.43           23
      Allowance for loan losses to
       total loans                      1.35             1.29            6
      Allowance for loan losses to
       nonperforming loans              2.04 x           3.01 x        (97)
 
     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.
    (C) Excludes $4.8 million of NPLs classified as held for accelerated
        disposition at March 31, 2001.
        Including these NPLs, NPAs to loans and foreclosed property were
        0.81%, NPAs to total assets were 0.53%, NPLs to total loans were
        0.72%, and the AFLL to NPLs was 1.88x.
 
     OTHER FINANCIAL DATA, continued
     CENTURA BANKS, INC. AND SUBSIDIARIES
 
                                 Three Months Ended March 31,
                                                         As a Percent of
                                                        Average Assets (A)
      (Dollars in           2001      2000    Change       2001       2000
       thousands)
     NONINTEREST INCOME
     Service charges on
      deposit accounts  $15,295  $15,355       (0.4) %    0.53 %    0.55 %
     Credit card and
      related fees        2,124    2,071        2.6       0.07      0.07
     Insurance and
      brokerage
      commissions         6,232    7,167      (13.0)      0.22      0.25
     Other service
      charges, commissions
      and fees            3,081    3,645      (15.5)      0.11      0.13
     Fees for trust
      services            2,665    2,751       (3.1)      0.09      0.10
     Mortgage income      5,463    3,705       47.4       0.19      0.13
     Negative goodwill
      amortization          334      334         --       0.01      0.01
     Operating lease
      income, net           414      699      (40.8)      0.01      0.03
     Other noninterest
      income              8,757    7,397       18.4       0.30      0.26
     Noninterest income,
      excluding securities
      transactions       44,365   43,124        2.9       1.53      1.53
     Securities gains
      (losses), net         750      220      240.9       0.03      0.01
     Securities gains (losses),
      net - merger
      related                --  (15,075)    (100.0)        --     (0.54)
     Total noninterest
      income            $45,115  $28,269       59.6 %     1.56 %    1.00 %
 
     NONINTEREST EXPENSE
     Salaries and
      overtime          $37,452  $35,618        5.1 %     1.29 %    1.26 %
     Fringe benefits and
      other personnel
      costs              10,484    8,148       28.7       0.36      0.29
     Occupancy            6,367    6,453       (1.3)      0.22      0.23
     Equipment            6,754    6,148        9.9       0.23      0.22
     Foreclosed real estate
      losses and related
      operating expense     605      662       (8.6)      0.02      0.02
     Marketing            2,450    1,479       65.7       0.08      0.05
     Fees for outsourced
      services            5,576    4,369       27.6       0.19      0.16
     Professional and
      legal fees          4,245    3,084       37.6       0.15      0.11
     Other administrative 3,071    2,970        3.4       0.11      0.11
     FDIC insurance         365      438      (16.7)      0.01      0.02
     Deposit intangible and
      goodwill
      amortization        4,132    3,153       31.1       0.14      0.11
     Office supplies, postage
      and telephone       6,474    6,373        1.6       0.22      0.23
     Other operating      3,325    7,409      (55.1)      0.13      0.25
     Total NIE before
      merger-related and
      other significant
      charges            91,300   86,304        5.8       3.15      3.06
     Merger-related expenses
      and other significant
      charges              (318)  24,338     (101.3)     (0.01)     0.87
     Total noninterest
      expense           $90,982 $110,642      (17.8) %    3.14 %    3.93 %
 
     OTHER PERFORMANCE RATIOS
     Pretax operating profit
      margin (B)(D)       36.46 %  38.92 %     (246) bp
     Efficiency ratio
      (C)(D)              58.92    57.12        179
     Net interest income
      analysis-taxable
      equivalent:
      Selected average
       yields/rates:
        Loans              9.04 %   8.94 %       10  bp
        Taxable securities 7.22     6.63         59
        Tax-exempt
         securities        8.69     7.75         94
        Short-term
         investments       5.54     5.18         36
        Mortgage loans
         held-for-sale     8.00     9.05       (105)
        Interest-earning
         assets            8.53     8.29         24
        Total interest-bearing
         deposits          4.72     4.39         33
        Borrowed funds     5.42     5.68        (26)
        Long-term debt     6.17     6.06         11
        Total interest-bearing
         liabilities       5.70     4.78         92
         Interest rate
          spread           2.83     3.51        (68)
        Net interest
         margin            4.07     4.07         --
 
 
     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 the sum of taxable equivalent net
          interest income plus noninterest income.
     (D)  Calculation excludes merger-related and other significant charges.
 
 
     QUARTERLY FINANCIAL TRENDS
     CENTURA BANKS, INC. AND SUBSIDIARIES
 
                    2001                          2000
                   First       Fourth       Third       Second       First
                  Quarter      Quarter     Quarter     Quarter      Quarter
 
     (Dollars in thousands,
     except per share data)
 
     FINANCIAL SUMMARY (A)
      Assets  $11,764,869  $11,405,683  $11,261,701  $11,087,991 $11,333,016
      Earning
       assets,
       net     10,805,374   10,466,489   10,323,647   10,161,950  10,408,008
      Loans,
       gross    7,721,247    7,713,182    7,631,191    7,604,252   7,481,313
      Investment
       securities,
       net      2,981,039    2,655,105    2,599,384    2,456,812   2,774,077
      Total
       deposits 7,484,106    7,655,687    7,584,598    7,581,910   7,819,217
      Interest-
       bearing
       liabili-
       ties     9,528,849    9,225,498    9,114,564    8,974,603   9,256,578
      Shareholders'
       equity     984,483      926,344      902,196      869,319     860,095
      Total market
       capitalization
       (period
       end)     1,959,862    1,902,355    1,527,838    1,353,339   1,817,042
      Net
       income      35,521       35,794       34,003       20,923       8,035
      Full-time
       equivalents  3,327        3,379        3,443        3,450       3,450
 
     PROFITABILITY/PERFORMANCE SUMMARY(A)
      Pretax operating
       profit margin
       (B)          36.46%       36.23%       37.10%       31.80%      38.92%
      Efficiency
       ratio(B)     58.92        59.23        58.16        60.07       57.12
      Net interest
       margin        4.07         4.14         4.06         4.10        4.07
      Return on average
       assets        1.22         1.25         1.20         0.76        0.29
      Return on
       average
       equity       14.63        15.37        15.00         9.68        3.76
      Average equity
       to average
       assets        8.37         8.12         8.01         7.84        7.59
 
     PER SHARE SUMMARY
      Earnings per
       share -
        basic      $ 0.90       $ 0.91      $  0.85      $  0.53     $  0.20
      Earnings per
       share -
        diluted      0.89         0.90         0.85         0.52        0.20
      Cash dividends
       paid          0.34         0.34         0.34         0.34        0.32
      Book value per
       share        25.00        24.26        23.05        22.09       21.72
      Closing market
       price       49.450       48.250       38.313       33.953      45.813
 
     KEY INTANGIBLE ASSETS (C)
      Goodwill   $136,158     $139,928     $143,520     $125,606    $131,514
      Mortgage
       servicing
       rights       6,779        6,517        6,037       31,797      35,076
 
     ASSET QUALITY SUMMARY(C)
      Nonperforming assets
       (NPAs)(D)  $58,541      $54,372      $54,631      $45,929     $37,161
      Allowance for
       loan
       losses     104,705      104,275      104,036      103,271      97,450
      Nonperforming
       assets to total
       assets (D)    0.49 %       0.47 %       0.48 %       0.41 %      0.33 %
      Allowance for
       loan losses to
       total loans   1.35         1.36         1.35         1.35        1.29
      Net charge-offs
       to average
       loans         0.35         0.33         0.32         0.32        0.22
 
 
                                                    1st Qtr 01
                                                         vs.
                                                     4th Qtr 00
 
     (Dollars in thousands,
     except per share data)
 
     FINANCIAL SUMMARY (A)
      Assets                                           3.1  %
      Earning assets, net                              3.2
      Loans, gross                                     0.1
      Investment securities, net                      12.3
      Total deposits                                  (2.2)
 
     Interest-bearing liabilities                      3.3
     Shareholders' equity                              6.3
 
     Total market capitalization (period end)          3.0
     Net income                                       (0.8)
 
     Full-time equivalents                            (1.5)
 
 
     PROFITABILITY/PERFORMANCE SUMMARY(A)
     Pretax operating profit margin(B)                  23 bp
     Efficiency ratio(B)                               (31)
     Net interest margin                                (7)
     Return on average assets                           (2)
     Return on average equity                          (74)
     Average equity to average assets                   25
 
     PER SHARE SUMMARY
     Earnings per share - basic                       (1.1) %
     Earnings per share - diluted                     (1.1)
     Cash dividends paid                               5.9
     Book value per share                              3.1
     Closing market price                              2.5
 
     KEY INTANGIBLE ASSETS (C)
     Goodwill                                         (2.7) %
     Mortgage servicing rights                         4.0
 
     ASSET QUALITY SUMMARY(C)
     Nonperforming assets (NPA's)(D)                   7.7 %
     Allowance for loan losses                         0.4
     Nonperforming assets to total assets (D)            2 bp
     Allowance for loan losses to total loans           (1)
     Net charge-offs to average loans                    2
 
 
     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.
     (D) Excludes $4.8 million and $6.0 million of nonperforming loans (NPLs)
         classified as held for accelerated disposition at March 31, 2001 and
         December 31, 2000, respectively.  Including these NPLs, NPAs to total
         assets were 0.53% and 0.51% for the quarters ended March 31, 2001 and
         December 31, 2000, respectively.
 
 SOURCE  Centura Banks, Inc.

RELATED LINKS

http://www.centura.com