Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CAPITAL BANK CORP | form8-k.htm |
Exhibit 99.1
CONTACT:
Christopher G. Marshall
Chief Financial Officer
Phone: (704) 554-5901
E-mail: cmarshall@nafhinc.com
FOR IMMEDIATE RELEASE
Capital Bank Corporation Announces Financial Results for the Third Quarter of 2011
RALEIGH, N.C., November 9, 2011 – Capital Bank Corporation (the “Company”) (Nasdaq: CBKN), a majority-owned subsidiary of North American Financial Holdings, Inc. (“NAFH”), today reported unaudited financial results for the third quarter of 2011. Operating and financial highlights include the following:
|
•
|
Net income totaled $1.9 million, or $0.02 per share, in the third quarter of 2011 and totaled $2.6 million, or $0.03 per share, in the successor period from January 29 to September 30, 2011;
|
|
|
•
|
GreenBank, which was the wholly-owned banking subsidiary of Green Bankshares, Inc. (“Green Bankshares”), was merged with and into Capital Bank, NA on September 7, 2011;
|
|
|
•
|
Following the GreenBank merger, the Company held a 26% ownership interest in Capital Bank, NA, which has $6.6 billion in assets and operates 146 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia; and
|
|
|
•
|
The Company’s technology platform was converted to NAFH’s technology platform.
|
“We are delighted to welcome our new Tennessee teammates to Capital Bank, and we are excited to serve our Tennessee customers. With strong capital, we are in position to help customers grow and achieve their financial objectives across our Southeastern footprint,” stated Gene Taylor, Chairman and Chief Executive Officer of NAFH and Capital Bank Corporation.
“We saw significant progress in virtually every area of the bank during the third quarter. Our strong loan originations, deposit growth and efficiency improvements are strong indicators of continued growth in profitability,” commented Chris Marshall, Chief Financial Officer of NAFH and Capital Bank Corporation.
Bank Merger
On June 30, 2011, Capital Bank, formerly a wholly-owned subsidiary of the Company (“Old Capital Bank”), merged with and into NAFH National Bank, a national banking association, with NAFH National Bank as the surviving entity. In connection with the Bank Merger, NAFH National Bank changed its name to Capital Bank, NA. On September 7, 2011, NAFH acquired a controlling interest in Green Bankshares and merged its banking subsidiary, GreenBank, with and into Capital Bank, NA. Following the GreenBank merger, Capital Bank, NA is now owned by the Company, NAFH, TIB Financial Corp. (“TIB Financial”) and Green Bankshares. NAFH is the owner of approximately 83% of the Company’s common stock, approximately 94% of TIB Financial’s common stock and approximately 90% of Green Bankshares’ common stock.
Capital Bank, NA (formerly NAFH Bank) was formed on July 16, 2010 in connection with the purchase and assumption of assets and deposits of three banks – Metro Bank of Dade County (Miami, Florida), Turnberry Bank (Aventura, Florida) and First National Bank of the South (Spartanburg, South Carolina) – from the Federal Deposit Insurance Corporation (the “FDIC”) and is a party to loss sharing agreements with the FDIC covering the large majority of the loans it acquired from the FDIC. On April 29, 2011, Capital Bank, NA merged with TIB Bank, then a wholly-owned subsidiary of TIB Financial.
The Bank Merger occurred pursuant to the terms of an Agreement of Merger entered into by and between Old Capital Bank and Capital Bank, NA, dated as of June 30, 2011. In the Bank Merger, each share of Old Capital Bank common stock was converted into the right to receive shares of Capital Bank, NA common stock based on each entity’s relative tangible book value on March 31, 2011. Following the GreenBank merger, the Company now owns approximately 26% of Capital Bank, NA, with NAFH having a direct ownership of 19%, TIB Financial owning 21%, and Green Bankshares owning the remaining 34%.
- 1 -
As of September 30, 2011, Capital Bank, NA operated 146 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia and had total assets of $6.6 billion, total deposits of $5.3 billion and shareholders’ equity of $931.1 million.
The Bank Merger, the preceding merger of TIB Bank and Capital Bank, NA, and the succeeding merger of GreenBank and Capital Bank, NA were restructuring transactions between commonly-controlled entities. At the time of the Bank Merger, due to the de-consolidation of Old Capital Bank, the balance of accumulated other comprehensive income was reclassified to common stock within shareholders’ equity. Immediately following the Bank Merger, on June 30, 2011, NAFH, the Company and TIB Financial made cash contributions of additional capital to Capital Bank, NA of $4.7 million, $6.1 million and $5.2 million, respectively, in proportion to their respective ownership interests in Capital Bank, NA. On September 30, 2011, the Company made a $10.0 million contribution of additional capital to Capital Bank, NA in exchange for additional shares of Capital Bank, NA. These capital contributions were made to provide additional capital support for the general business operations of Capital Bank, NA.
The Company reports its investment in Capital Bank, NA on the Consolidated Balance Sheet as an equity method investment in that entity. As of September 30, 2011, the Company’s investment in Capital Bank, NA totaled $241.5 million, which reflected the Company’s pro rata ownership of Capital Bank, NA’s total shareholders’ equity. The Company also had an advance to Capital Bank, NA totaling $3.4 million as of September 30, 2011. In the quarter ended September 30, 2011, the Company increased the equity investment balance by $2.2 million based on its equity in Capital Bank, NA’s net income and increased the equity investment balance by $836 thousand based on its equity in Capital Bank, NA’s other comprehensive income.
The following table presents summarized financial information for the Company’s equity method investee, Capital Bank, NA:
|
(Dollars in thousands)
|
Three Months
Ended
Sep. 30, 2011
|
||||
|
Interest income
|
$
|
60,782
|
|||
|
Interest expense
|
8,543
|
||||
|
Net interest income
|
52,239
|
||||
|
Provision for loan losses
|
9,764
|
||||
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Noninterest income
|
12,840
|
||||
|
Noninterest expense
|
44,778
|
||||
|
Net income
|
$
|
6,858
|
|||
Potential Merger of the Company and NAFH
On September 1, 2011, the Boards of Directors of NAFH and the Company approved and adopted a merger agreement. The merger agreement provides for the merger, following the receipt of shareholder approval by the Company’s shareholders (including NAFH), of the Company with and into NAFH, with NAFH continuing as the surviving entity. In the merger, each share of the Company’s common stock issued and outstanding immediately prior to the completion of the merger, except for shares for which appraisal rights are properly exercised and certain shares held by NAFH or the Company, will be converted into the right to receive 0.1354 of a share of NAFH Class A common stock. No fractional shares of Class A common stock will be issued in connection with the merger, and holders of the Company’s common stock will be entitled to receive cash in lieu thereof.
Since NAFH is the majority shareholder of the Company, NAFH will be able to determine the outcome of the shareholder vote needed to approve the merger.
Net Interest Income
Net interest income in the third quarter of 2011 was significantly impacted by the Bank Merger, upon which Old Capital Bank’s earning assets and interest-bearing liabilities were de-consolidated from the Company. Following the Bank Merger on June 30, 2011, the Company’s interest-bearing liabilities, which consisted of subordinated debentures, significantly exceeded interest-earning assets, thus creating negative net interest income and a negative net interest margin. Net interest income for the quarter ended September 30, 2011 (Successor) and the quarter ended September 30, 2010 (Predecessor) totaled ($270) thousand and $13.4 million, respectively. Net interest margin decreased from 3.48% in the third quarter of 2010 (Predecessor) to (31.57)% in the third quarter of 2011 (Successor) primarily due to the Bank Merger.
- 2 -
Further, net interest income for the period of January 29 to September 30, 2011 (Successor), the period of January 1 to January 28, 2011 (Predecessor), and the nine months ended September 30, 2010 (Predecessor) totaled $23.6 million, $4.0 million and $38.7 million, respectively. Net interest margin increased from 3.30% in the first nine months of 2010 (Predecessor) to 3.85% for the period of January 29 to September 30, 2011 (Successor) primarily due to a decline in funding costs as the average rate on total interest-bearing liabilities fell from 1.94% to 1.11% over that period. Average earning assets decreased from $1.61 billion in the nine months ended September 30, 2010 (Predecessor) to $1.54 billion in the period of January 1 to January 28, 2011 (Predecessor) to $943.2 million in the period of January 29 to September 30, 2011 (Successor). The decline in average earning assets in the successor period was primarily related to the Bank Merger.
Provision for Loan Losses
Due to the Bank Merger, there was no provision for loan losses in the quarter ended September 30, 2011 (Successor). Provision for loan losses for the quarter ended September 30, 2010 (Predecessor) totaled $6.8 million. In addition, provision for loan losses for the period of January 29 to September 30, 2011 (Successor), the period of January 1 to January 28, 2011 (Predecessor), and the nine months ended September 30, 2010 (Predecessor) totaled $1.7 million, $40 thousand and $38.5 million, respectively. The loan loss provision in the successor period reflects $752 thousand of estimated losses inherent in loans originated subsequent to the NAFH Investment date, $561 thousand of impairment related to probable decreases in cash flows expected to be collected on certain PCI loan pools, and $339 thousand of losses on acquired non-PCI loans.
Noninterest Income
Noninterest income for the quarter ended September 30, 2011 (Successor) and the quarter ended September 30, 2010 (Predecessor) totaled $2.2 million and $2.5 million, respectively. Noninterest income in the third quarter of 2011 (Successor) was solely related to the Company’s equity income from its investment in Capital Bank, NA.
Further, noninterest income for the period of January 29 to September 30, 2011 (Successor), the period of January 1 to January 28, 2011 (Predecessor), and the nine months ended September 30, 2010 (Predecessor) totaled $5.5 million, $832 thousand and $7.5 million, respectively. Noninterest income in the successor period was significantly impacted by the Company’s $2.2 million of equity income from its investment in Capital Bank, NA. Additionally, noninterest income in the first nine months of 2010 (Predecessor) benefited from $511 thousand of gains recorded on the sale of investment securities while no gains or losses were recognized in the period from January 29 to September 30, 2011 (Successor) or the period from January 1 to January 28, 2011 (Predecessor).
Noninterest Expense
Noninterest expense for the quarter ended September 30, 2011 (Successor) and the quarter ended September 30, 2010 (Predecessor) totaled $76 thousand and $14.2 million, respectively. Expenses in the successor period were significantly reduced by the Bank Merger and related de-consolidation of Old Capital Bank.
Further, noninterest expense for the period from January 29 to September 30, 2011 (Successor), the period from January 1 to January 28, 2011 (Predecessor) and the nine months ended September 30, 2010 (Predecessor) totaled $25.1 million, $4.2 million and $39.2 million, respectively. Additionally, expenses in the first nine months of 2011 were significantly reduced by the Bank Merger and related de-consolidation of Old Capital Bank. Expenses in the period from January 29 to September 30, 2011 (Successor) were impacted by a $4.0 million contract termination fee related to the conversion and integration of the Company’s operations onto a common technology platform utilized across the NAFH enterprise. This system conversion is intended to create operating efficiencies and better position the Company for future growth.
Forward-looking Statements
Information in this press release contains forward-looking statements. Such forward looking statements can be identified by the use of forward looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “believe,” or “continue,” or the negative thereof or other variations thereof or comparable terminology. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, market and economic conditions, the management of our growth, the risks associated with Capital Bank, NA’s loan portfolio and real estate holdings, local economic conditions affecting retail and commercial real estate, ability to integrate our new management and directors without encountering potential difficulties, the Company’s geographic concentration in the southeastern region of the United States, ability to integrate the operations of Old Capital Bank with those of Capital Bank, NA, the potential for the interests of the other shareholders of Capital Bank, NA to differ from those of the Company, restrictions imposed by Capital Bank, NA’s loss sharing agreements with the FDIC, the assumptions and judgments required by loss share accounting and the acquisition method of accounting, competition within the industry, dependence on key personnel, government legislation and regulation, the risks associated with identification, completion and integration of any future acquisitions, risks related to Capital Bank, NA’s technology and information systems, the fact that the Company has experienced net losses during the last three fiscal years, risks associated with the controlling interest of NAFH in the Company, and risks associated with the limited liquidity of the Company’s common stock. Additional factors that could cause actual results to differ materially are discussed in Capital Bank Corporation’s filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Capital Bank Corporation does not undertake a duty to update any forward-looking statements in this press release.
- 3 -
CAPITAL BANK CORPORATION
Results of Operations
|
Successor Company
|
Predecessor Company
|
|||||||||||||||||||
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(Dollars in thousands except per share data)
|
Three Months
Ended
Sep. 30, 2011
|
Three Months
Ended
Jun. 30, 2011
|
Jan. 29, 2011
to
Mar. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Three Months
Ended
Dec. 31, 2010
|
Three Months
Ended
Sep. 30, 2010
|
||||||||||||||
|
Interest income
|
$
|
85
|
$
|
17,440
|
$
|
12,281
|
$
|
5,955
|
$
|
18,327
|
$
|
19,535
|
||||||||
|
Interest expense
|
355
|
3,551
|
2,260
|
1,996
|
6,040
|
6,153
|
||||||||||||||
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Net interest income (loss)
|
(270
|
)
|
13,889
|
10,021
|
3,959
|
12,287
|
13,382
|
|||||||||||||
|
Provision for loan losses
|
–
|
1,485
|
167
|
40
|
20,011
|
6,763
|
||||||||||||||
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Net interest income (loss) after provision
|
(270
|
)
|
12,404
|
9,854
|
3,919
|
(7,724
|
)
|
6,619
|
||||||||||||
|
Noninterest income
|
2,169
|
2,065
|
1,252
|
832
|
8,004
|
2,500
|
||||||||||||||
|
Noninterest expense
|
76
|
12,753
|
12,229
|
4,155
|
15,129
|
14,210
|
||||||||||||||
|
Net income (loss) before taxes
|
1,823
|
1,716
|
(1,123
|
)
|
596
|
(14,849
|
)
|
(5,091
|
)
|
|||||||||||
|
Income tax expense (benefit)
|
(117
|
)
|
449
|
(549
|
)
|
–
|
18,634
|
3,975
|
||||||||||||
|
Net income (loss)
|
1,940
|
1,267
|
(574
|
)
|
596
|
(33,483
|
)
|
(9,066
|
)
|
|||||||||||
|
Dividends and accretion on preferred stock
|
–
|
–
|
–
|
861
|
589
|
588
|
||||||||||||||
|
Net income (loss) attributable to common shareholders
|
$
|
1,940
|
$
|
1,267
|
$
|
(574
|
)
|
$
|
(265
|
)
|
$
|
(34,072
|
)
|
$
|
(9,654
|
)
|
||||
|
Earnings (loss) per share – basic and diluted
|
$
|
0.02
|
$
|
0.01
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
$
|
(2.59
|
)
|
$
|
(0.74
|
)
|
||||
End of Period Balances
|
Successor Company
|
Predecessor Company
|
||||||||||||||||
|
(Dollars in thousands except per share data)
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2010
|
Sep. 30, 2010
|
||||||||||||
|
Total assets
|
$
|
247,606
|
$
|
247,576
|
$
|
1,704,656
|
$
|
1,585,547
|
$
|
1,649,699
|
|||||||
|
Total earning assets
|
3,393
|
3,393
|
1,531,366
|
1,537,863
|
1,579,489
|
||||||||||||
|
Cash and cash equivalents
|
2,435
|
12,477
|
116,650
|
66,745
|
68,069
|
||||||||||||
|
Investment securities
|
–
|
–
|
304,902
|
223,292
|
196,046
|
||||||||||||
|
Loans
|
–
|
–
|
1,125,260
|
1,254,479
|
1,324,932
|
||||||||||||
|
Allowance for loan losses
|
–
|
–
|
167
|
36,061
|
36,249
|
||||||||||||
|
Investment in and advance to Capital Bank, NA
|
244,863
|
234,671
|
–
|
–
|
–
|
||||||||||||
|
Intangible assets
|
–
|
–
|
35,807
|
1,774
|
2,006
|
||||||||||||
|
Deposits
|
–
|
–
|
1,349,661
|
1,343,286
|
1,359,411
|
||||||||||||
|
Borrowings
|
–
|
–
|
93,513
|
121,000
|
129,000
|
||||||||||||
|
Subordinated debentures
|
18,625
|
18,561
|
19,431
|
34,323
|
34,323
|
||||||||||||
|
Shareholders’ equity
|
222,831
|
228,377
|
228,760
|
76,688
|
116,103
|
||||||||||||
|
Per Share Data
|
|||||||||||||||||
|
Book value
|
$
|
2.60
|
$
|
2.66
|
$
|
2.68
|
$
|
2.75
|
$
|
5.81
|
|||||||
|
Tangible book value
|
2.25
|
2.29
|
2.26
|
2.61
|
5.65
|
||||||||||||
|
Common shares outstanding
|
85,802,164
|
85,802,164
|
85,489,260
|
12,877,846
|
12,880,954
|
||||||||||||
- 4 -
CAPITAL BANK CORPORATION
Average Balances and Yields/Rates
|
Successor Company
|
Predecessor Company
|
|||||||||||||||||||
|
(Dollars in thousands)
|
Three Months
Ended
Sep. 30, 2011
|
Three Months
Ended
Jun. 30, 2011
|
Jan. 29, 2011
to
Mar. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Three Months
Ended
Dec. 31, 2010
|
Three Months
Ended
Sep. 30, 2010
|
||||||||||||||
|
Average Balances
|
||||||||||||||||||||
|
Total assets
|
$
|
251,092
|
$
|
1,702,281
|
$
|
1,693,890
|
$
|
1,592,750
|
$
|
1,648,467
|
$
|
1,665,975
|
||||||||
|
Total earning assets
|
3,393
|
1,518,835
|
1,520,847
|
1,542,617
|
1,577,651
|
1,578,241
|
||||||||||||||
|
Investment securities
|
–
|
338,035
|
242,622
|
223,854
|
198,524
|
218,883
|
||||||||||||||
|
Loans
|
–
|
1,127,603
|
1,138,367
|
1,249,787
|
1,295,748
|
1,342,835
|
||||||||||||||
|
Deposits
|
–
|
1,343,599
|
1,340,741
|
1,350,336
|
1,366,905
|
1,345,562
|
||||||||||||||
|
Borrowings
|
–
|
93,349
|
98,599
|
120,032
|
126,130
|
150,478
|
||||||||||||||
|
Subordinated debentures
|
18,603
|
18,848
|
19,313
|
34,323
|
34,323
|
34,323
|
||||||||||||||
|
Shareholders’ equity
|
231,778
|
231,107
|
226,423
|
78,724
|
110,788
|
125,103
|
||||||||||||||
|
Yields/Rates 1
|
||||||||||||||||||||
|
Yield on earning assets
|
9.94
|
%
|
4.68
|
%
|
5.07
|
%
|
4.61
|
%
|
4.68
|
%
|
5.04
|
%
|
||||||||
|
Cost of interest-bearing liabilities
|
7.57
|
1.07
|
1.04
|
1.69
|
1.71
|
1.76
|
||||||||||||||
|
Net interest spread
|
2.37
|
3.61
|
4.03
|
2.92
|
2.97
|
3.28
|
||||||||||||||
|
Net interest margin
|
(31.57
|
)
|
3.74
|
4.15
|
3.09
|
3.16
|
3.48
|
|||||||||||||
|
1
|
Annualized and on a fully taxable equivalent basis.
|
- 5 -
CAPITAL BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
Successor
Company
|
Predecessor
Company
|
|||||||
|
(Dollars in thousands)
|
Sep. 30, 2011
|
Dec. 31, 2010
|
||||||
|
Assets
|
||||||||
|
Cash and cash equivalents:
|
||||||||
|
Cash and due from banks
|
$
|
2,435
|
$
|
13,646
|
||||
|
Interest-bearing deposits with banks
|
–
|
53,099
|
||||||
|
Total cash and cash equivalents
|
2,435
|
66,745
|
||||||
|
Investment securities:
|
||||||||
|
Investment securities – available for sale, at fair value
|
–
|
214,991
|
||||||
|
Other investments
|
–
|
8,301
|
||||||
|
Total investment securities
|
–
|
223,292
|
||||||
|
Mortgage loans held for sale
|
–
|
6,993
|
||||||
|
Loans:
|
||||||||
|
Loans – net of unearned income and deferred fees
|
–
|
1,254,479
|
||||||
|
Allowance for loan losses
|
–
|
(36,061
|
)
|
|||||
|
Net loans
|
–
|
1,218,418
|
||||||
|
Investment in and advance to Capital Bank, NA
|
244,863
|
–
|
||||||
|
Other real estate
|
–
|
18,334
|
||||||
|
Premises and equipment, net
|
–
|
25,034
|
||||||
|
Other intangible assets, net
|
–
|
1,774
|
||||||
|
Other assets
|
308
|
24,957
|
||||||
|
Total assets
|
$
|
247,606
|
$
|
1,585,547
|
||||
|
Liabilities
|
||||||||
|
Deposits:
|
||||||||
|
Demand deposits
|
$
|
–
|
$
|
116,113
|
||||
|
NOW accounts
|
–
|
185,782
|
||||||
|
Money market accounts
|
–
|
137,422
|
||||||
|
Savings deposits
|
–
|
30,639
|
||||||
|
Time deposits
|
–
|
873,330
|
||||||
|
Total deposits
|
–
|
1,343,286
|
||||||
|
Borrowings
|
–
|
121,000
|
||||||
|
Subordinated debentures
|
18,625
|
34,323
|
||||||
|
Other liabilities
|
6,150
|
10,250
|
||||||
|
Total liabilities
|
24,775
|
1,508,859
|
||||||
|
Shareholders’ Equity
|
||||||||
|
Preferred stock, $1,000 par value; 100,000 shares authorized; 41,279 shares issued and outstanding (liquidation preference of $41,279) at December 31, 2010
|
–
|
40,418
|
||||||
|
Common stock, no par value; 300,000,000 shares authorized; 85,802,164 and 12,877,846 shares issued and outstanding
|
219,362
|
145,594
|
||||||
|
Retained earnings (accumulated deficit)
|
2,633
|
(108,027
|
)
|
|||||
|
Accumulated other comprehensive income (loss)
|
836
|
(1,297
|
)
|
|||||
|
Total shareholders’ equity
|
222,831
|
76,688
|
||||||
|
Total liabilities and shareholders’ equity
|
$
|
247,606
|
$
|
1,585,547
|
||||
- 6 -
CAPITAL BANK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
Successor
Company
|
Predecessor
Company
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||||
|
(Dollars in thousands except per share data)
|
Three Months
Ended
Sep. 30, 2011
|
Three Months
Ended
Sep. 30, 2010
|
Jan. 29, 2011
to
Sep. 30, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Nine Months
Ended
Sep. 30, 2010
|
|||||||||||||
|
Interest income:
|
||||||||||||||||||
|
Loans and loan fees
|
$
|
–
|
$
|
17,357
|
$
|
25,971
|
$
|
5,479
|
$
|
52,080
|
||||||||
|
Investment securities:
|
||||||||||||||||||
|
Taxable interest income
|
–
|
1,854
|
3,206
|
391
|
5,851
|
|||||||||||||
|
Tax-exempt interest income
|
–
|
285
|
398
|
74
|
1,369
|
|||||||||||||
|
Dividends
|
–
|
22
|
59
|
–
|
58
|
|||||||||||||
|
Federal funds and other interest income
|
85
|
17
|
172
|
11
|
37
|
|||||||||||||
|
Total interest income
|
85
|
19,535
|
29,806
|
5,955
|
59,395
|
|||||||||||||
|
Interest expense:
|
||||||||||||||||||
|
Deposits
|
–
|
4,683
|
4,560
|
1,551
|
16,438
|
|||||||||||||
|
Borrowings and subordinated debentures
|
355
|
1,470
|
1,606
|
445
|
4,281
|
|||||||||||||
|
Total interest expense
|
355
|
6,153
|
6,166
|
1,996
|
20,719
|
|||||||||||||
|
Net interest income (loss)
|
(270
|
)
|
13,382
|
23,640
|
3,959
|
38,676
|
||||||||||||
|
Provision for loan losses
|
–
|
6,763
|
1,652
|
40
|
38,534
|
|||||||||||||
|
Net interest income (loss) after provision for loan losses
|
(270
|
)
|
6,619
|
21,988
|
3,919
|
142
|
||||||||||||
|
Noninterest income:
|
||||||||||||||||||
|
Service charges and other fees
|
–
|
746
|
1,355
|
291
|
2,468
|
|||||||||||||
|
Bank card services
|
–
|
521
|
847
|
174
|
1,479
|
|||||||||||||
|
Mortgage origination and other loan fees
|
–
|
442
|
518
|
210
|
1,108
|
|||||||||||||
|
Brokerage fees
|
–
|
271
|
308
|
78
|
743
|
|||||||||||||
|
Bank-owned life insurance
|
–
|
138
|
134
|
10
|
632
|
|||||||||||||
|
Equity income from investment in Capital Bank, NA
|
2,169
|
–
|
2,169
|
–
|
–
|
|||||||||||||
|
Net gain on sale of investment securities
|
–
|
185
|
–
|
–
|
511
|
|||||||||||||
|
Other
|
–
|
197
|
155
|
69
|
604
|
|||||||||||||
|
Total noninterest income
|
2,169
|
2,500
|
5,486
|
832
|
7,545
|
|||||||||||||
|
Noninterest expense:
|
||||||||||||||||||
|
Salaries and employee benefits
|
–
|
5,918
|
9,525
|
1,977
|
16,637
|
|||||||||||||
|
Occupancy
|
–
|
1,460
|
2,926
|
548
|
4,418
|
|||||||||||||
|
Furniture and equipment
|
–
|
867
|
1,401
|
275
|
2,312
|
|||||||||||||
|
Data processing and telecommunications
|
–
|
488
|
911
|
180
|
1,530
|
|||||||||||||
|
Advertising and public relations
|
–
|
435
|
325
|
131
|
1,464
|
|||||||||||||
|
Office expenses
|
–
|
320
|
498
|
93
|
940
|
|||||||||||||
|
Professional fees
|
–
|
626
|
543
|
190
|
1,785
|
|||||||||||||
|
Business development and travel
|
–
|
363
|
550
|
87
|
937
|
|||||||||||||
|
Amortization of other intangible assets
|
–
|
235
|
478
|
62
|
705
|
|||||||||||||
|
ORE losses and miscellaneous loan costs
|
–
|
1,833
|
1,608
|
176
|
3,858
|
|||||||||||||
|
Directors’ fees
|
–
|
236
|
93
|
68
|
828
|
|||||||||||||
|
FDIC deposit insurance
|
–
|
712
|
1,076
|
266
|
2,028
|
|||||||||||||
|
Contract termination fees
|
–
|
–
|
3,955
|
–
|
–
|
|||||||||||||
|
Other
|
76
|
717
|
1,169
|
102
|
1,738
|
|||||||||||||
|
Total noninterest expense
|
76
|
14,210
|
25,058
|
4,155
|
39,180
|
|||||||||||||
|
Net income (loss) before taxes
|
1,823
|
(5,091
|
)
|
2,416
|
596
|
(31,493
|
)
|
|||||||||||
|
Income tax expense (benefit)
|
(117
|
)
|
3,975
|
(217
|
)
|
–
|
(3,510
|
)
|
||||||||||
|
Net income (loss)
|
1,940
|
(9,066
|
)
|
2,633
|
596
|
(27,983
|
)
|
|||||||||||
|
Dividends and accretion on preferred stock
|
–
|
588
|
–
|
861
|
1,766
|
|||||||||||||
|
Net (income) loss attributable to common shareholders
|
$
|
1,940
|
$
|
(9,654
|
)
|
$
|
2,633
|
$
|
(265
|
)
|
$
|
(29,749
|
)
|
|||||
|
Earnings (loss) per common share – basic
|
$
|
0.02
|
$
|
(0.74
|
)
|
$
|
0.03
|
$
|
(0.02
|
)
|
$
|
(2.34
|
)
|
|||||
|
Earnings (loss) per common share – diluted
|
$
|
0.02
|
$
|
(0.74
|
)
|
$
|
0.03
|
$
|
(0.02
|
)
|
$
|
(2.34
|
)
|
|||||
- 7 -
CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
Tax Equivalent Basis 1
|
Successor Company
|
Predecessor Company
|
|||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
Three Months Ended
Sep. 30, 2011
|
Three Months Ended
Jun. 30, 2011
|
Three Months Ended
Sep. 30, 2010
|
|||||||||||||||||||||||||||
|
Average Balance
|
Amount Earned
|
Average Rate
|
Average Balance
|
Amount Earned
|
Average Rate
|
Average Balance
|
Amount Earned
|
Average Rate
|
||||||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||||||||
|
Loans 2
|
$
|
–
|
$
|
–
|
–
|
%
|
$
|
1,128,456
|
$
|
15,029
|
5.34
|
%
|
$
|
1,342,835
|
$
|
17,512
|
5.23
|
%
|
||||||||||||
|
Investment securities 3
|
–
|
–
|
–
|
334,230
|
2,639
|
3.16
|
211,547
|
2,309
|
4.37
|
|||||||||||||||||||||
|
Interest-bearing deposits
|
–
|
–
|
–
|
56,149
|
40
|
0.29
|
23,859
|
17
|
0.29
|
|||||||||||||||||||||
|
Advance to Capital Bank, NA
|
3,393
|
85
|
9.94
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||
|
Total interest-earning assets
|
3,393
|
$
|
85
|
9.94
|
%
|
1,518,835
|
$
|
17,708
|
4.68
|
%
|
1,578,241
|
$
|
19,838
|
5.04
|
%
|
|||||||||||||||
|
Cash and due from banks
|
9,268
|
16,587
|
17,285
|
|||||||||||||||||||||||||||
|
Other assets
|
238,431
|
166,859
|
70,449
|
|||||||||||||||||||||||||||
|
Total assets
|
$
|
251,092
|
$
|
1,702,281
|
$
|
1,665,975
|
||||||||||||||||||||||||
|
Liabilities and Equity
|
||||||||||||||||||||||||||||||
|
NOW and money market accounts
|
$
|
–
|
$
|
–
|
–
|
%
|
$
|
345,307
|
$
|
666
|
0.77
|
%
|
$
|
323,242
|
$
|
634
|
0.79
|
%
|
||||||||||||
|
Savings accounts
|
–
|
–
|
–
|
32,241
|
10
|
0.12
|
31,594
|
10
|
0.13
|
|||||||||||||||||||||
|
Time deposits
|
–
|
–
|
–
|
843,725
|
2,110
|
1.00
|
859,968
|
4,039
|
1.88
|
|||||||||||||||||||||
|
Total interest-bearing deposits
|
–
|
–
|
–
|
1,221,273
|
2,786
|
0.91
|
1,214,804
|
4,683
|
1.55
|
|||||||||||||||||||||
|
Borrowings
|
–
|
–
|
–
|
93,849
|
410
|
1.76
|
150,478
|
1,156
|
3.08
|
|||||||||||||||||||||
|
Subordinated debentures
|
18,603
|
355
|
7.57
|
18,848
|
355
|
7.55
|
34,323
|
314
|
3.67
|
|||||||||||||||||||||
|
Total interest-bearing liabilities
|
18,603
|
$
|
355
|
7.57
|
%
|
1,333,470
|
$
|
3,551
|
1.07
|
%
|
1,399,605
|
$
|
6,153
|
1.76
|
%
|
|||||||||||||||
|
Noninterest-bearing deposits
|
–
|
122,326
|
130,758
|
|||||||||||||||||||||||||||
|
Other liabilities
|
711
|
15,378
|
10,509
|
|||||||||||||||||||||||||||
|
Total liabilities
|
19,314
|
1,471,174
|
1,540,872
|
|||||||||||||||||||||||||||
|
Shareholders’ equity
|
231,778
|
231,107
|
125,103
|
|||||||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$
|
251,092
|
$
|
1,702,281
|
$
|
1,665,975
|
||||||||||||||||||||||||
|
Net interest spread 4
|
2.37
|
%
|
3.61
|
%
|
3.28
|
%
|
||||||||||||||||||||||||
|
Tax equivalent adjustment
|
$
|
–
|
$
|
268
|
$
|
303
|
||||||||||||||||||||||||
|
Net interest income and net interest margin 5
|
$
|
(270
|
)
|
(31.57
|
)%
|
$
|
14,157
|
3.74
|
%
|
$
|
13,685
|
3.48
|
%
|
|||||||||||||||||
|
1
|
The tax equivalent adjustment is computed using a federal tax rate of 34% and is applied to interest income from tax exempt municipal loans and investment securities.
|
|
2
|
Loans include mortgage loans held for sale in addition to nonaccrual loans for which accrual of interest has not been recorded.
|
|
3
|
The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any.
|
|
4
|
Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
|
5
|
Net interest margin represents net interest income divided by average interest-earning assets.
|
- 8 -
CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
Tax Equivalent Basis 1
|
Successor Company
|
Predecessor Company
|
|||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
Period of
Jan. 29 to Sep. 30, 2011
|
Period of
Jan. 1 to Jan. 28, 2011
|
Nine Months Ended
Sep. 30, 2010
|
|||||||||||||||||||||||||||
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
||||||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||||||||
|
Loans 2
|
$
|
702,197
|
$
|
26,184
|
5.62
|
%
|
$
|
1,253,296
|
$
|
5,530
|
5.20
|
%
|
$
|
1,369,688
|
$
|
52,539
|
5.13
|
%
|
||||||||||||
|
Investment securities 3
|
184,886
|
3,893
|
3.16
|
225,971
|
504
|
2.68
|
220,525
|
7,987
|
4.83
|
|||||||||||||||||||||
|
Interest-bearing deposits
|
54,834
|
87
|
0.24
|
63,350
|
11
|
0.20
|
23,142
|
37
|
0.21
|
|||||||||||||||||||||
|
Advance to Capital Bank, NA
|
1,290
|
85
|
9.94
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||
|
Total interest-earning assets
|
943,207
|
$
|
30,249
|
4.84
|
%
|
1,542,617
|
$
|
6,045
|
4.61
|
%
|
1,613,355
|
$
|
60,563
|
5.02
|
%
|
|||||||||||||||
|
Cash and due from banks
|
13,752
|
16,112
|
18,177
|
|||||||||||||||||||||||||||
|
Other assets
|
188,626
|
34,021
|
74,275
|
|||||||||||||||||||||||||||
|
Total assets
|
$
|
1,145,585
|
$
|
1,592,750
|
$
|
1,705,807
|
||||||||||||||||||||||||
|
Liabilities and Equity
|
||||||||||||||||||||||||||||||
|
NOW and money market accounts
|
$
|
213,761
|
$
|
1,084
|
0.76
|
%
|
$
|
334,668
|
$
|
211
|
0.74
|
%
|
$
|
330,596
|
$
|
2,168
|
0.88
|
%
|
||||||||||||
|
Savings accounts
|
19,808
|
16
|
0.12
|
30,862
|
3
|
0.11
|
30,445
|
30
|
0.13
|
|||||||||||||||||||||
|
Time deposits
|
524,847
|
3,460
|
0.99
|
870,146
|
1,337
|
1.81
|
874,331
|
14,240
|
2.18
|
|||||||||||||||||||||
|
Total interest-bearing deposits
|
758,416
|
4,560
|
0.91
|
1,235,676
|
1,551
|
1.48
|
1,235,372
|
16,438
|
1.78
|
|||||||||||||||||||||
|
Borrowings
|
59,141
|
665
|
1.70
|
120,032
|
343
|
3.36
|
158,158
|
3,446
|
2.91
|
|||||||||||||||||||||
|
Subordinated debentures
|
18,868
|
941
|
7.52
|
34,323
|
102
|
3.50
|
33,304
|
830
|
3.33
|
|||||||||||||||||||||
|
Repurchase agreements
|
–
|
–
|
–
|
–
|
–
|
–
|
2,068
|
5
|
0.32
|
|||||||||||||||||||||
|
Total interest-bearing liabilities
|
836,425
|
$
|
6,166
|
1.11
|
%
|
1,390,031
|
$
|
1,996
|
1.69
|
%
|
1,428,902
|
$
|
20,719
|
1.94
|
%
|
|||||||||||||||
|
Noninterest-bearing deposits
|
73,696
|
114,660
|
132,058
|
|||||||||||||||||||||||||||
|
Other liabilities
|
8,202
|
9,635
|
10,585
|
|||||||||||||||||||||||||||
|
Total liabilities
|
918,323
|
1,514,326
|
1,571,545
|
|||||||||||||||||||||||||||
|
Shareholders’ equity
|
227,262
|
78,424
|
134,262
|
|||||||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$
|
1,145,585
|
$
|
1,592,750
|
$
|
1,705,807
|
||||||||||||||||||||||||
|
Net interest spread 4
|
3.73
|
%
|
2.92
|
%
|
3.08
|
%
|
||||||||||||||||||||||||
|
Tax equivalent adjustment
|
$
|
443
|
$
|
90
|
$
|
1,168
|
||||||||||||||||||||||||
|
Net interest income and net interest margin 5
|
$
|
24,083
|
3.85
|
%
|
$
|
4,049
|
3.09
|
%
|
$
|
39,844
|
3.30
|
%
|
||||||||||||||||||
|
1
|
The tax equivalent adjustment is computed using a federal tax rate of 34% and is applied to interest income from tax exempt municipal loans and investment securities.
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2
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Loans include mortgage loans held for sale in addition to nonaccrual loans for which accrual of interest has not been recorded.
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3
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The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any.
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4
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Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
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5
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Net interest margin represents net interest income divided by average interest-earning assets.
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