Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - Capital Bank Financial Corp. | cbf1q16slidesfinal2.htm |
| 8-K - 8-K - Capital Bank Financial Corp. | a8-kxfy2016q1earningsrelea.htm |
CBF Reports First Quarter Results
Page 1
April 22, 2016
EXHIBIT 99.1
CONTACT:
Kenneth A. Posner
Chief of Strategic Planning and Investor Relations
Phone: (212) 399-4020
E-mail: Kposner@cbfcorp.com
Capital Bank Financial Corp. Reports 1Q GAAP and Core EPS of $0.22 and $0.38
CHARLOTTE, N.C., April 22, 2016 (GLOBE NEWSWIRE) -- Capital Bank Financial Corp. (Nasdaq: CBF) (the “Company”) today reported net income for the first quarter of 2016 of $9.8 million, or $0.22 per diluted share, and core net income of $16.9 million, or $0.38 per diluted share. Core adjustments for the first quarter of 2016 included a pre-tax charge of $9.2 million, related to the early termination of the FDIC loss share agreements, $0.6 million of non-tax deductible merger related expenses, $1.1 million of tax deductible merger related expenses, and $0.1 million of severance. Year over year core net income and core net income per diluted share rose 30% and 41%, respectively.
First quarter highlights include:
• | Loan portfolio grew 11% year over year; |
• | Total deposits were up 11% year over year, with a 21% sequential annualized growth in Core deposits; |
• | Remaining FDIC loss share agreements were terminated; |
• | Tangible Book Value per share increased to $19.77; and |
• | Declared a $0.10 per share quarterly common stock dividend. |
Gene Taylor, Chairman and Chief Executive Officer of Capital Bank Financial Corp., commented, “The highlight of the quarter was strong core deposit growth, tight expense control, and excellent credit metrics. As anticipated, loan portfolio growth slowed in the first quarter, reflecting the decision to put Capital Bank's prime indirect auto portfolio into run-off during the fourth quarter, which is one component of our strategy to improve profitability over the next two years.”
Chris Marshall, Chief Financial Officer of Capital Bank Financial Corp., added, “Integration planning for CommunityOne merger is nearly complete, thanks to hard work by teammates at both banks. We are looking forward to doing even more business with our customers upon closing.”
Loan Portfolio and Composition
During the first quarter, the loan portfolio was flat at $5.6 billion. New loans of $296 million were offset by loan resolutions totaling $29 million, and principal repayments of $265 million. New loan production during the first quarter was absent of indirect auto lending, which contributed $65 million during the prior quarter.
The effects of exiting indirect auto lending had a $68 million loan portfolio impact in comparison to the prior quarter, as shown below:
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CBF Reports First Quarter Results
Page 2
April 22, 2016
(Dollars in millions) | Mar 31, 2016 | Dec 31, 2015 | ||||||
Beginning balance of gross loans | $ | 5,633 | $ | 5,405 | ||||
New loan production | 296 | 487 | ||||||
Principal repayments / resolutions | (294 | ) | (259 | ) | ||||
Ending balance of gross loans | $ | 5,635 | $ | 5,633 | ||||
Annualized loan growth rate | 0% | 17 | % | |||||
Indirect lending portfolio (contraction) growth | (34 | ) | 34 | |||||
Effect of discontinuing indirect lending, quarter over quarter | (68 | ) | ||||||
Loan growth rate (excluding impact of indirect lending) | 5 | % | ||||||
The relative composition of the Company’s loan portfolio at the end of the first quarter of 2016 and fourth and first quarters of 2015 was as follows:
Mar 31, 2016 | Dec 31, 2015 | Mar 31, 2015 | |||||||
Commercial real estate | 22 | % | 22 | % | 23 | % | |||
C&I | 44 | % | 43 | % | 43 | % | |||
Consumer | 32 | % | 32 | % | 32 | % | |||
Other | 2 | % | 3 | % | 2 | % | |||
Total | 100 | % | 100 | % | 100 | % | |||
Deposits Composition and Cost of Funds
During the first quarter, total deposits increased by $79.5 million to $5.9 billion. The sequential increase was mainly the result of the Company's continued focus on growing low-cost core deposits, which were up $213 million, or a 21% annualized rate. Partially offsetting the increase was a decrease in higher rate brokered deposits and time deposits, which were down $134 million. The cost of core deposits increased two basis points to 0.17%, mostly due to re-pricing of deposits as a result of the federal funds rate increase and increased money market balances. Core deposits include all checking, savings and money market accounts, excluding brokered, and now represent 70% of total deposits. Sequentially and year over year, the cost of total deposits increased two basis points and eight basis points, respectively, to 0.42%. The contractual cost of total deposits, which excludes purchase accounting, increased two basis point sequentially and four basis points year over year to 0.42%.
Net Interest Income and Net Interest Margin
Net interest income declined $0.7 million to $61.4 million from $62.1 million for the fourth quarter of 2015 mainly due to a shorter calendar, and increased $1.6 million from $59.7 million for the first quarter of 2015. The net interest margin for the first quarter of 2016 was 3.64%, a decline of six basis points sequentially and 32 basis points year over year. The sequential and year over year net interest margin decline was due to the lower average yield on new loans as compared to the yields of the Company's legacy acquired loans and the slight increase in the cost of total deposits. New and acquired non-impaired loans represent $4.6 billion with an average yield of 3.7%, compared to $1.0 billion of acquired loans outstanding with an average yield of 8.2%.
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CBF Reports First Quarter Results
Page 3
April 22, 2016
Non-Interest Income
Non-interest income declined $8.0 million to $2.6 million from $10.6 million for the fourth quarter of 2015 and declined $7.4 million from $9.9 million for the first quarter of 2015. The sequential decline was mainly driven by the termination of the FDIC loss share agreements, which resulted in additional FDIC indemnification asset expense of $7.7 million when compared to last quarter, and a decline in bank-owned life insurance income, resulting from a death benefit in the fourth quarter of 2015. The year over year decline was mainly driven by a $6.7 million increase in FDIC indemnification asset expense as discussed above, and a $0.5 million decline in investment advisory fee income.
Provision for Loan and Lease Losses and Credit Quality
The provision of $1.4 million recorded for the first quarter of 2016 included a $1.4 million provision for new and acquired non-impaired loans. There was a de minimis amount of reversal of provision on legacy loans during the quarter. Net charge-offs for the first quarter of 2016 were $1.1 million, down from $2.3 million in the fourth quarter of 2015.
At March 31, 2016, the allowance for loan and lease losses was $45.3 million, of which $24.5 million related to acquired impaired loans and $20.8 million related to new and acquired non-impaired loans. The allowance for loan and lease losses represents 0.80% of the Company's total $5.6 billion loan portfolio.
At March 31, 2016, non-performing loans were $64.6 million, down 5% from December 31, 2015, and down 49%, from March 31, 2015, mainly as a result of resolutions and upgrades.
Non-Interest Expense
Non-interest expense declined $0.8 million to $46.9 million from $47.8 million for the fourth quarter of 2015 and declined $5.7 million from $52.6 million for the first quarter of 2015. The sequential decline was mainly due to the absence of a $4.2 million charge in fourth quarter resulting from the termination of a legacy debit card processing contract, and a decrease of legacy credit expenses. Partially offsetting the decline was a $2.3 million increase in employee compensation mostly due to a seasonality increase in tax and employee benefit expenses, and a $0.3 million increase in occupancy expense and equipment expense.
The year over year decline was mainly due to the absence of a $2.3 million restructuring charge in the first quarter from consolidation of facilities and severance, a $1.7 million decline in employee compensation resulting from cost savings initiatives, and lower legacy credit costs as discussed above.
Income Tax Expense
Income tax expense was $5.8 million for the first quarter of 2016, an effective rate of 37%, compared to $8.8 million and 37% for the fourth quarter of 2015. Income tax expense was $6.5 million and 36% for the first quarter of 2015.
Financial Position
Total assets increased by $503 million to $7.5 billion as of March 31, 2016, from $7.0 billion as of March 31, 2015. During the quarter, the Company’s loan portfolio was flat at $5.6 billion. Total deposits increased by $80 million to $5.9 billion, and Core deposits increased by $213 million, or a 21% annualized rate. FHLB borrowings decreased $60 million. Tangible book value per share was $19.77 as of March 31, 2016, an increase of $0.24 and $0.28 over December 31, 2015 and March 31, 2015, respectively. During the first quarter, the Company repurchased 148 thousand shares of common stock for $4.4 million at an average price of $29.61. The Company has $101 million remaining under the current board authorized stock repurchase program.
The Company’s bank subsidiary, Capital Bank Corporation, had preliminary Tier 1 Leverage, Tier 1 Common, Tier 1 Risk-Based and Total Risk-Based capital ratios of 11.1%, 13.0%, 13.0% and 13.7%, respectively, as of March 31, 2016, under currently applicable regulations.
The Company declared a cash dividend of $0.10 per share, payable on May 25, 2016, to shareholders of record as of May 11, 2016.
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CBF Reports First Quarter Results
Page 4
April 22, 2016
Conference Call
The Company will host a conference call today at 10:00 a.m. Eastern Time. The number to call for this interactive teleconference is (719) 325-2469, and the confirmation pass code is 3145353. Please dial in 10 minutes prior to the beginning of the call. A telephonic replay of the conference call will be available through April 29, 2016, by dialing (719) 457-0820 and entering pass code 3145353. The live broadcast of the conference call will be available online at the Company’s web site at www.capitalbank-us.com, by following the link to Investor Relations. An on-line replay of the call will be available at the same site for 90 days.
Forward-Looking Statements
Information in this press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described under the caption “Risk Factors” in the annual report on Form 10-K and other periodic reports filed by us with the Securities and Exchange Commission. Any or all of our forward-looking statements in this press release may turn out to be inaccurate. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward looking statements including, but not limited to: (1) changes in general economic and financial market conditions; (2) changes in the regulatory environment; (3) economic conditions generally and in the financial services industry; (4) changes in the economy affecting real estate values; (5) our ability to achieve loan and deposit growth; (6) the completion of future acquisitions or business combinations and our ability to integrate any acquired businesses into our business model; (7) projected population and income growth in our targeted market areas; (8) competitive pressures in our markets and industry; (9) our ability to attract and retain key personnel; (10) changes in accounting policies or judgments and (11) volatility and direction of market interest rates and a weakening of the economy which could materially impact credit quality trends and the ability to generate loans. All forward-looking statements are necessarily only estimates of future results, and actual results may differ materially from expectations. You are, therefore, cautioned not to place undue reliance on such statements, which should be read in conjunction with the other cautionary statements that are included elsewhere in this press release. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
Use of Non-GAAP Financial Measures
Core net income, core efficiency ratio, core return-on-assets (“core ROA”), tangible book value and tangible book value per share are each non-GAAP measures used in this report. A reconciliation to the most directly comparable GAAP financial measures – net income in the case of core net income and core ROA, total non-interest income and total non-interest expense in the case of core efficiency ratio, and total shareholders’ equity in the case of tangible book value and tangible book value per share – appears in tabular form at the end of this release. The Company believes core net income, the core efficiency ratio and core ROA are useful for both investors and management to understand the effects of certain non-interest items and provide an alternative view of the Company’s performance over time and in comparison to the Company’s competitors. These measures should not be viewed as a substitute for net income. The Company believes that tangible book value and tangible book value per share are useful for both investors and management as these are measures commonly used by financial institutions, regulators and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company’s capital over time and in comparison to its competitors. These measures should not be viewed as a substitute for total shareholders’ equity.
These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
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Page 5
April 22, 2016
About Capital Bank Financial Corp.
Capital Bank Financial Corp. is a bank holding company, formed in 2009 to create a premier regional banking franchise in the southeastern United States. CBF is the parent of Capital Bank Corporation, a State of North Carolina chartered financial institution with $7.5 billion in total assets as of March 31, 2016, and 151 full-service banking offices throughout Florida, North and South Carolina, Tennessee and Virginia. To learn more about Capital Bank Financial Corporation, please visit www.capitalbank-us.com.
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CBF Reports First Quarter Results
Page 6
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share data)
(Unaudited)
Three Months Ended | |||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||||||||||
Interest and dividend income | $ | 69,472 | $ | 69,553 | $ | 68,718 | $ | 67,311 | $ | 66,046 | |||||||||
Interest expense | 8,105 | 7,475 | 7,081 | 6,626 | 6,317 | ||||||||||||||
Net Interest Income | 61,367 | 62,078 | 61,637 | 60,685 | 59,729 | ||||||||||||||
Provision (reversal) for loan and lease losses | 1,375 | 1,089 | 799 | 1,299 | (841 | ) | |||||||||||||
Net interest income after provision (reversal) for loan and lease losses | 59,992 | 60,989 | 60,838 | 59,386 | 60,570 | ||||||||||||||
Non-Interest Income | |||||||||||||||||||
Service charges on deposit accounts | 4,811 | 4,911 | 5,472 | 5,189 | 4,705 | ||||||||||||||
Debit card income | 3,086 | 3,029 | 3,113 | 3,176 | 2,964 | ||||||||||||||
Fees on mortgage loans originated and sold | 971 | 875 | 990 | 1,278 | 1,147 | ||||||||||||||
Investment advisory and trust fees | 497 | 597 | 860 | 1,125 | 1,006 | ||||||||||||||
FDIC indemnification asset expense | — | (1,526 | ) | (1,418 | ) | (2,499 | ) | (2,439 | ) | ||||||||||
Termination of loss share agreements | (9,178 | ) | — | — | — | — | |||||||||||||
Investment securities gains (losses), net | 40 | 54 | (43 | ) | 231 | 90 | |||||||||||||
Other-than-temporary impairment loss on investments: | |||||||||||||||||||
Gross impairment loss | — | — | — | (288 | ) | — | |||||||||||||
Other income | 2,339 | 2,657 | 2,444 | 2,151 | 2,447 | ||||||||||||||
Total non-interest income | 2,566 | 10,597 | 11,418 | 10,363 | 9,920 | ||||||||||||||
Non-Interest Expense | |||||||||||||||||||
Salaries and employee benefits | 22,162 | 20,219 | 22,620 | 21,881 | 23,881 | ||||||||||||||
Stock-based compensation expense | 317 | — | 309 | 108 | 284 | ||||||||||||||
Net occupancy and equipment expense | 7,703 | 7,385 | 7,621 | 7,754 | 8,129 | ||||||||||||||
Computer services | 3,575 | 3,479 | 3,471 | 3,343 | 3,397 | ||||||||||||||
Software expense | 2,036 | 2,061 | 2,198 | 2,082 | 2,142 | ||||||||||||||
Telecommunication expense | 1,532 | 1,168 | 1,515 | 1,367 | 1,380 | ||||||||||||||
OREO valuation expense | 467 | 341 | 2,075 | 1,710 | 1,390 | ||||||||||||||
Net gains on sales of OREO | (679 | ) | (801 | ) | (351 | ) | (957 | ) | (7 | ) | |||||||||
Foreclosed asset related expense | 285 | 405 | 872 | 600 | 674 | ||||||||||||||
Loan workout expense | 244 | 650 | 194 | 795 | 623 | ||||||||||||||
Conversion and merger related expense | 1,687 | 704 | — | — | — | ||||||||||||||
Professional fees | 1,612 | 1,529 | 1,958 | 1,723 | 1,734 | ||||||||||||||
Losses on extinguishment of debt | — | — | — | 1,438 | — | ||||||||||||||
Restructuring charges, net | 142 | 4,248 | 23 | 178 | 2,341 | ||||||||||||||
Contingent value right expense | — | — | — | 4 | 116 | ||||||||||||||
Regulatory assessments | 1,275 | 1,486 | 1,423 | 1,831 | 1,695 | ||||||||||||||
Other expense | 4,580 | 4,882 | 4,418 | 5,645 | 4,868 | ||||||||||||||
Total non-interest expense | 46,938 | 47,756 | 48,346 | 49,502 | 52,647 | ||||||||||||||
Income before income taxes | 15,620 | 23,830 | 23,910 | 20,247 | 17,843 | ||||||||||||||
Income tax expense | 5,780 | 8,809 | 8,589 | 7,257 | 6,454 | ||||||||||||||
Net income | $ | 9,840 | $ | 15,021 | $ | 15,321 | $ | 12,990 | $ | 11,389 | |||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 0.23 | $ | 0.35 | $ | 0.34 | $ | 0.28 | $ | 0.25 | |||||||||
Diluted | $ | 0.22 | $ | 0.34 | $ | 0.33 | $ | 0.28 | $ | 0.24 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 43,063 | 43,499 | 45,359 | 45,913 | 46,294 | ||||||||||||||
Diluted | 43,904 | 44,550 | 46,534 | 47,220 | 47,632 | ||||||||||||||
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Page 7
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)
(Unaudited)
Mar 31, 2016 | Dec 31, 2015 | Mar 31, 2015 | |||||||||
Assets | |||||||||||
Cash and due from banks | $ | 88,802 | $ | 87,985 | $ | 96,484 | |||||
Interest-bearing deposits in other banks | 93,218 | 56,711 | 143,497 | ||||||||
Total cash and cash equivalents | 182,020 | 144,696 | 239,981 | ||||||||
Trading securities | 3,418 | 3,013 | 2,853 | ||||||||
Investment securities available-for-sale at fair value (amortized cost $657,631, $640,455 and $568,621, respectively) | 663,925 | 637,329 | 575,593 | ||||||||
Investment securities held-to-maturity at amortized cost (fair value $467,372, $475,134 and $457,939, respectively) | 460,483 | 472,505 | 448,962 | ||||||||
Loans held for sale | 8,070 | 10,569 | 12,403 | ||||||||
Loans, net of deferred loan costs and fees | 5,626,887 | 5,622,147 | 5,065,606 | ||||||||
Less: Allowance for loan and lease losses | 45,263 | 45,034 | 48,225 | ||||||||
Loans, net | 5,581,624 | 5,577,113 | 5,017,381 | ||||||||
Other real estate owned | 48,505 | 52,776 | 71,453 | ||||||||
FDIC indemnification asset | — | 6,725 | 15,195 | ||||||||
Receivable from FDIC | — | 678 | 3,172 | ||||||||
Premises and equipment, net | 157,131 | 159,149 | 163,501 | ||||||||
Goodwill | 134,522 | 134,522 | 134,522 | ||||||||
Intangible assets, net | 14,166 | 15,100 | 17,943 | ||||||||
Deferred income tax asset, net | 95,363 | 105,316 | 121,083 | ||||||||
Other assets | 130,571 | 129,988 | 152,694 | ||||||||
Total Assets | $ | 7,479,798 | $ | 7,449,479 | $ | 6,976,736 | |||||
Liabilities and Shareholders’ Equity | |||||||||||
Liabilities | |||||||||||
Deposits: | |||||||||||
Non-interest bearing demand | $ | 1,190,831 | $ | 1,121,160 | $ | 1,114,423 | |||||
Interest bearing demand | 1,402,342 | 1,382,732 | 1,405,390 | ||||||||
Money market | 1,262,581 | 1,190,121 | 924,228 | ||||||||
Savings | 420,073 | 418,879 | 491,394 | ||||||||
Time deposits | 1,663,906 | 1,747,318 | 1,428,121 | ||||||||
Total deposits | 5,939,733 | 5,860,210 | 5,363,556 | ||||||||
Federal Home Loan Bank advances | 400,849 | 460,898 | 356,043 | ||||||||
Short-term borrowings | 16,200 | 12,410 | 27,605 | ||||||||
Long-term borrowings | 86,328 | 85,777 | 139,975 | ||||||||
Accrued expenses and other liabilities | 39,695 | 43,919 | 35,208 | ||||||||
Total liabilities | $ | 6,482,805 | $ | 6,463,214 | $ | 5,922,387 | |||||
Shareholders’ equity | |||||||||||
Preferred stock $0.01 par value: 50,000 shares authorized, 0 shares issued | — | — | — | ||||||||
Common stock-Class A $0.01 par value: 200,000 shares authorized, 37,207 issued and 26,636 outstanding, 37,012 issued 26,589 outstanding and 37,310 issued and 30,037 outstanding, respectively. | 372 | 370 | 373 | ||||||||
Common stock-Class B $0.01 par value: 200,000 shares authorized, 18,327 issued and 16,554 outstanding, 18,327 issued and 16,554 outstanding and 18,369 issued and 16,595 outstanding, respectively. | 183 | 183 | 184 | ||||||||
Additional paid in capital | 1,076,931 | 1,076,415 | 1,081,912 | ||||||||
Retained earnings | 214,268 | 208,742 | 169,792 | ||||||||
Accumulated other comprehensive (loss) income | 3,878 | (5,196 | ) | 274 | |||||||
Treasury stock, at cost, 12,345, 12,196 and 9,047 shares, respectively | (298,639 | ) | (294,249 | ) | (198,186 | ) | |||||
Total shareholders’ equity | 996,993 | 986,265 | 1,054,349 | ||||||||
Total Liabilities and Shareholders’ Equity | $ | 7,479,798 | $ | 7,449,479 | $ | 6,976,736 | |||||
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Page 8
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
KEY METRICS
(Dollars in thousands)
(Unaudited)
Three Months Ended | |||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||||||||||
Performance Ratios | |||||||||||||||||||
Interest rate spread | 3.50 | % | 3.57 | % | 3.68 | % | 3.79 | % | 3.83 | % | |||||||||
Net interest margin | 3.64 | % | 3.70 | % | 3.82 | % | 3.94 | % | 3.96 | % | |||||||||
Return on average assets | 0.53 | % | 0.82 | % | 0.86 | % | 0.75 | % | 0.66 | % | |||||||||
Return on average shareholders' equity | 3.96 | % | 5.99 | % | 5.85 | % | 4.90 | % | 4.29 | % | |||||||||
Efficiency ratio | 73.42 | % | 65.71 | % | 66.18 | % | 69.67 | % | 75.59 | % | |||||||||
Average interest-earning assets to average interest-bearing liabilities | 129.54 | % | 129.55 | % | 132.10 | % | 133.39 | % | 131.94 | % | |||||||||
Average loans receivable to average deposits | 95.66 | % | 96.68 | % | 96.01 | % | 94.12 | % | 95.47 | % | |||||||||
Yield on interest-earning assets | 4.11 | % | 4.14 | % | 4.26 | % | 4.36 | % | 4.38 | % | |||||||||
Cost of interest-bearing liabilities | 0.62 | % | 0.57 | % | 0.58 | % | 0.57 | % | 0.55 | % | |||||||||
Asset and Credit Quality Ratios-Total Loans | |||||||||||||||||||
Non-accrual loans | $ | 8,526 | $ | 8,945 | $ | 9,647 | $ | 9,807 | $ | 11,482 | |||||||||
Nonperforming acquired loans | $ | 56,041 | $ | 59,194 | $ | 72,023 | $ | 83,515 | $ | 115,865 | |||||||||
Nonperforming loans to loans receivable | 1.15 | % | 1.21 | % | 1.51 | % | 1.79 | % | 2.51 | % | |||||||||
Nonperforming assets to total assets | 1.51 | % | 1.63 | % | 1.88 | % | 2.23 | % | 2.85 | % | |||||||||
Covered loans to total gross loans | — | % | 1.30 | % | 1.45 | % | 3.39 | % | 3.71 | % | |||||||||
ALLL to nonperforming assets | 39.97 | % | 37.13 | % | 33.88 | % | 30.56 | % | 24.22 | % | |||||||||
ALLL to total gross loans | 0.80 | % | 0.80 | % | 0.86 | % | 0.92 | % | 0.95 | % | |||||||||
Annualized net charge-offs/average loans | 0.08 | % | 0.17 | % | 0.20 | % | 0.12 | % | 0.09 | % | |||||||||
Asset and Credit Quality Ratios-New Loans | |||||||||||||||||||
Nonperforming new loans to total new loans receivable | 0.11 | % | 0.11 | % | 0.17 | % | 0.19 | % | 0.22 | % | |||||||||
New loans ALLL to total gross new loans | 0.47 | % | 0.47 | % | 0.51 | % | 0.59 | % | 0.61 | % | |||||||||
Asset and Credit Quality Ratios-Acquired Loans | |||||||||||||||||||
Nonperforming acquired loans to total acquired loans receivable | 4.67 | % | 4.69 | % | 5.21 | % | 5.58 | % | 7.30 | % | |||||||||
Covered acquired loans to total gross acquired loans | — | % | 5.43 | % | 5.45 | % | 11.38 | % | 11.47 | % | |||||||||
Acquired loans ALLL to total gross acquired loans | 1.93 | % | 1.83 | % | 1.80 | % | 1.71 | % | 1.67 | % | |||||||||
Capital Ratios (Company) | |||||||||||||||||||
Total average shareholders' equity to total average assets | 13.35 | % | 13.67 | % | 14.79 | % | 15.41 | % | 15.48 | % | |||||||||
Tangible common equity ratio (1) | 11.57 | % | 11.46 | % | 12.26 | % | 13.15 | % | 13.22 | % | |||||||||
Tier 1 leverage capital ratio | 12.49 | % | 12.67 | % | 13.60 | % | 14.66 | % | 14.42 | % | |||||||||
Tier 1 common capital ratio | 13.38 | % | 14.73 | % | 14.44 | % | 16.07 | % | 16.42 | % | |||||||||
Tier 1 risk-based capital ratio | 14.58 | % | 13.63 | % | 15.60 | % | 17.33 | % | 17.70 | % | |||||||||
Total risk-based capital ratio | 15.32 | % | 15.47 | % | 16.38 | % | 18.18 | % | 18.66 | % | |||||||||
Capital Ratios (Bank) | |||||||||||||||||||
Tangible common equity ratio (1) | 11.45 | % | 11.20 | % | 11.36 | % | 11.35 | % | 11.32 | % | |||||||||
Tier 1 leverage capital ratio | 11.10 | % | 11.09 | % | 11.19 | % | 11.15 | % | 10.89 | % | |||||||||
Tier 1 common capital ratio | 12.95 | % | 12.89 | % | 12.85 | % | 13.18 | % | 13.34 | % | |||||||||
Tier 1 risk-based capital ratio | 12.95 | % | 12.89 | % | 12.85 | % | 13.18 | % | 13.34 | % | |||||||||
Total risk-based capital ratio | 13.72 | % | 13.68 | % | 13.69 | % | 14.10 | % | 14.30 | % | |||||||||
(1) See "Reconciliation of Non-GAAP Measures"
- MORE -
CBF Reports First Quarter Results
Page 9
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
LOANS AND DEPOSITS
(Dollars in thousands)
(Unaudited)
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||||||||||
Loans | |||||||||||||||||||
Non-owner occupied commercial real estate | $ | 850,766 | $ | 866,392 | $ | 847,225 | $ | 834,351 | $ | 823,763 | |||||||||
Other commercial construction and land | 194,971 | 196,795 | 192,283 | 182,283 | 180,166 | ||||||||||||||
Multifamily commercial real estate | 75,737 | 80,708 | 82,762 | 76,754 | 88,980 | ||||||||||||||
1-4 family residential construction and land | 96,703 | 93,242 | 87,193 | 78,572 | 66,547 | ||||||||||||||
Total commercial real estate | 1,218,177 | 1,237,137 | 1,209,463 | 1,171,960 | 1,159,456 | ||||||||||||||
Owner occupied commercial real estate | 1,095,460 | 1,104,972 | 1,065,875 | 1,030,111 | 1,038,493 | ||||||||||||||
Commercial and industrial | 1,375,233 | 1,309,704 | 1,219,101 | 1,181,451 | 1,125,708 | ||||||||||||||
Lease financing | 1,088 | 1,256 | 1,488 | 1,661 | 1,834 | ||||||||||||||
Total commercial | 2,471,781 | 2,415,932 | 2,286,464 | 2,213,223 | 2,166,035 | ||||||||||||||
1-4 family residential | 1,015,071 | 1,017,791 | 985,982 | 959,224 | 928,832 | ||||||||||||||
Home equity loans | 368,510 | 375,276 | 373,993 | 375,271 | 379,946 | ||||||||||||||
Indirect auto loans | 317,863 | 351,817 | 318,841 | 263,723 | 222,087 | ||||||||||||||
Other consumer loans | 84,108 | 84,661 | 82,483 | 77,867 | 74,666 | ||||||||||||||
Total consumer | 1,785,552 | 1,829,545 | 1,761,299 | 1,676,085 | 1,605,531 | ||||||||||||||
Other | 159,447 | 150,102 | 147,718 | 145,146 | 146,987 | ||||||||||||||
Total loans | $ | 5,634,957 | $ | 5,632,716 | $ | 5,404,944 | $ | 5,206,414 | $ | 5,078,009 | |||||||||
Deposits | |||||||||||||||||||
Non-interest bearing demand | $ | 1,190,831 | $ | 1,121,160 | $ | 1,099,252 | $ | 1,132,085 | $ | 1,114,423 | |||||||||
Interest bearing demand | 1,402,342 | 1,382,732 | 1,251,365 | 1,367,123 | 1,405,390 | ||||||||||||||
Money market | 1,162,546 | 1,040,086 | 927,391 | 991,520 | 924,228 | ||||||||||||||
Savings | 420,073 | 418,879 | 436,385 | 479,885 | 491,394 | ||||||||||||||
Total core deposits | 4,175,792 | 3,962,857 | 3,714,393 | 3,970,613 | 3,935,435 | ||||||||||||||
Wholesale money market | 100,035 | 150,035 | 78,015 | — | — | ||||||||||||||
Time deposits | 1,663,906 | 1,747,318 | 1,773,170 | 1,521,810 | 1,428,121 | ||||||||||||||
Total deposits | $ | 5,939,733 | $ | 5,860,210 | $ | 5,565,578 | $ | 5,492,423 | $ | 5,363,556 | |||||||||
- MORE -
CBF Reports First Quarter Results
Page 10
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
LEGACY CREDIT EXPENSES
(Dollars in thousands)
(Unaudited)
Three Months Ended | |||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||||||||||
Provision (reversal) on legacy loans | $ | 9 | $ | (1,161 | ) | $ | 492 | $ | (523 | ) | $ | (1,926 | ) | ||||||
FDIC indemnification asset expense | — | 1,526 | 1,418 | 2,499 | 2,439 | ||||||||||||||
OREO valuation expense | 467 | 341 | 2,075 | 1,710 | 1,390 | ||||||||||||||
Termination of loss share agreements | 9,178 | — | — | — | — | ||||||||||||||
Net gains on sales of OREO | (679 | ) | (801 | ) | (351 | ) | (957 | ) | (7 | ) | |||||||||
Foreclosed asset related expense | 285 | 405 | 872 | 600 | 674 | ||||||||||||||
Loan workout expense | 244 | 650 | 194 | 795 | 623 | ||||||||||||||
Salaries and employee benefits | 522 | 549 | 797 | 796 | 832 | ||||||||||||||
Total legacy credit expenses | $ | 10,026 | $ | 1,509 | $ | 5,497 | $ | 4,920 | $ | 4,025 | |||||||||
- MORE -
CBF Reports First Quarter Results
Page 11
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
Three Months Ended March 31, 2016 | Three Months Ended December 31, 2015 | |||||||||||||||||||||
Average Balances | Interest | Yield/Rate | Average Balances | Interest | Yield/Rate | |||||||||||||||||
Interest earning assets | ||||||||||||||||||||||
Loans (1) | $ | 5,611,488 | $ | 63,009 | 4.52 | % | $ | 5,496,222 | $ | 63,035 | 4.55 | % | ||||||||||
Investment securities (1) | 1,122,523 | 6,483 | 2.32 | % | 1,119,848 | 6,355 | 2.25 | % | ||||||||||||||
Interest bearing deposits in other banks | 73,188 | 84 | 0.46 | % | 40,177 | 23 | 0.23 | % | ||||||||||||||
Other earning assets (2) | 25,136 | 315 | 5.04 | % | 42,473 | 553 | 5.17 | % | ||||||||||||||
Total interest earning assets | 6,832,335 | $ | 69,891 | 4.11 | % | 6,698,720 | $ | 69,966 | 4.14 | % | ||||||||||||
Non-interest earning assets | 618,087 | 633,796 | ||||||||||||||||||||
Total assets | $ | 7,450,422 | $ | 7,332,516 | ||||||||||||||||||
Interest bearing liabilities | ||||||||||||||||||||||
Time deposits | $ | 1,689,653 | $ | 4,120 | 0.98 | % | $ | 1,774,732 | $ | 4,124 | 0.92 | % | ||||||||||
Money market | 1,247,333 | 1,067 | 0.34 | % | 1,081,968 | 780 | 0.29 | % | ||||||||||||||
Interest bearing demand | 1,370,957 | 648 | 0.19 | % | 1,286,737 | 529 | 0.16 | % | ||||||||||||||
Savings | 419,588 | 227 | 0.22 | % | 426,686 | 236 | 0.22 | % | ||||||||||||||
Total interest bearing deposits | 4,727,531 | 6,062 | 0.52 | % | 4,570,123 | 5,669 | 0.49 | % | ||||||||||||||
Short-term borrowings and FHLB advances | 460,892 | 532 | 0.46 | % | 515,302 | 365 | 0.28 | % | ||||||||||||||
Long-term borrowings | 85,986 | 1,511 | 7.07 | % | 85,438 | 1,441 | 6.69 | % | ||||||||||||||
Total interest bearing liabilities | 5,274,409 | 8,105 | 0.62 | % | 5,170,863 | $ | 7,475 | 0.57 | % | |||||||||||||
Non-interest bearing demand | 1,138,782 | 1,114,932 | ||||||||||||||||||||
Other liabilities | 42,418 | 44,479 | ||||||||||||||||||||
Shareholders’ equity | 994,813 | 1,002,242 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,450,422 | $ | 7,332,516 | ||||||||||||||||||
Net interest income and spread | $ | 61,786 | 3.50 | % | $ | 62,491 | 3.57 | % | ||||||||||||||
Net interest margin | 3.64 | % | 3.70 | % | ||||||||||||||||||
(1) Presented on a fully tax equivalent basis
(2) Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stocks
- MORE -
CBF Reports First Quarter Results
Page 12
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | |||||||||||||||||||||
Average Balances | Interest | Yield/Rate | Average Balances | Interest | Yield/Rate | |||||||||||||||||
Interest earning assets | ||||||||||||||||||||||
Loans (1) | $ | 5,611,488 | $ | 63,009 | 4.52 | % | $ | 5,044,763 | $ | 60,710 | 4.88 | % | ||||||||||
Investment securities (1) | 1,122,523 | 6,483 | 2.32 | % | 1,014,448 | 5,141 | 2.06 | % | ||||||||||||||
Interest bearing deposits in other banks | 73,188 | 84 | 0.46 | % | 58,654 | 33 | 0.23 | % | ||||||||||||||
Other earning assets (2) | 25,136 | 315 | 5.04 | % | 50,803 | 688 | 5.49 | % | ||||||||||||||
Total interest earning assets | 6,832,335 | $ | 69,891 | 4.11 | % | 6,168,668 | $ | 66,572 | 4.38 | % | ||||||||||||
Non-interest earning assets | 618,087 | 685,654 | ||||||||||||||||||||
Total assets | $ | 7,450,422 | $ | 6,854,322 | ||||||||||||||||||
Interest bearing liabilities | ||||||||||||||||||||||
Time deposits | $ | 1,689,653 | $ | 4,120 | 0.98 | % | $ | 1,409,605 | $ | 2,999 | 0.86 | % | ||||||||||
Money market | 1,247,333 | 1,067 | 0.34 | % | 914,385 | 554 | 0.25 | % | ||||||||||||||
Interest bearing demand | 1,370,957 | 648 | 0.19 | % | 1,397,011 | 592 | 0.17 | % | ||||||||||||||
Savings | 419,588 | 227 | 0.22 | % | 496,907 | 265 | 0.22 | % | ||||||||||||||
Total interest bearing deposits | 4,727,531 | $ | 6,062 | 0.52 | % | 4,217,908 | 4,410 | 0.42 | % | |||||||||||||
Short-term borrowings and FHLB advances | 460,892 | 532 | 0.46 | % | 319,901 | 182 | 0.23 | % | ||||||||||||||
Long-term borrowings | 85,986 | 1,511 | 7.07 | % | 137,394 | 1,725 | 5.09 | % | ||||||||||||||
Total interest bearing liabilities | 5,274,409 | 8,105 | 0.62 | % | 4,675,203 | $ | 6,317 | 0.55 | % | |||||||||||||
Non-interest bearing demand | 1,138,782 | 1,066,401 | ||||||||||||||||||||
Other liabilities | 42,418 | 51,653 | ||||||||||||||||||||
Shareholders’ equity | 994,813 | 1,061,065 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,450,422 | $ | 6,854,322 | ||||||||||||||||||
Net interest income and spread | $ | 61,786 | 3.50 | % | $ | 60,255 | 3.83 | % | ||||||||||||||
Net interest margin | 3.64 | % | 3.96 | % | ||||||||||||||||||
(1) Presented on a fully tax equivalent basis
(2) Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stocks
- MORE -
CBF Reports First Quarter Results
Page 13
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES
(Dollars in thousands)
(Unaudited)
CORE NET INCOME | Three Months Ended | |||||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Mar 31, 2015 | ||||||||||||||||||||||
Net Income | $ | 9,840 | $ | 9,840 | $ | 15,021 | $ | 15,021 | $ | 11,389 | $ | 11,389 | ||||||||||||
Pre-Tax | After-Tax | Pre-Tax | After-Tax | Pre-Tax | After-Tax | |||||||||||||||||||
Adjustments | ||||||||||||||||||||||||
Non-interest income | ||||||||||||||||||||||||
Indemnification asset termination | 9,178 | 5,670 | — | — | — | — | ||||||||||||||||||
Security (gains) losses* | (40 | ) | (25 | ) | (54 | ) | (33 | ) | (90 | ) | (55 | ) | ||||||||||||
Non-interest expense | ||||||||||||||||||||||||
Stock-based compensation expense* | — | — | — | — | 95 | 58 | ||||||||||||||||||
Contingent value right expense* | — | — | — | — | 116 | 72 | ||||||||||||||||||
Severance expense* | 75 | 46 | — | — | 111 | 68 | ||||||||||||||||||
Restructuring expense* | 142 | 88 | 32 | 20 | 2,341 | 1,444 | ||||||||||||||||||
Conversion costs and merger tax deductible* | 1,107 | 684 | 33 | 20 | — | — | ||||||||||||||||||
Legal merger non deductible | 580 | 580 | 673 | 673 | — | — | ||||||||||||||||||
Contract termination* | — | — | 4,215 | 2,594 | — | — | ||||||||||||||||||
Tax effect of adjustments* | (3,999 | ) | N/A | (1,625 | ) | N/A | (986 | ) | N/A | |||||||||||||||
Core Net Income | $ | 16,883 | $ | 16,883 | $ | 18,295 | $ | 18,295 | $ | 12,976 | $ | 12,976 | ||||||||||||
Diluted shares | 43,904 | 44,550 | 47,632 | |||||||||||||||||||||
Core Net Income per share | $ | 0.38 | $ | 0.41 | $ | 0.27 | ||||||||||||||||||
Average Assets | 7,450,422 | 7,332,516 | 6,854,322 | |||||||||||||||||||||
ROA** | 0.53 | % | 0.82 | % | 0.66 | % | ||||||||||||||||||
Core ROA*** | 0.91 | % | 1.00 | % | 0.76 | % | ||||||||||||||||||
* Tax effected at an income tax rate of 38%
** ROA: Annualized net income / Average assets
*** Core ROA: Annualized core net income / Average assets
- MORE -
CBF Reports First Quarter Results
Page 14
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES (Continuation)
(Dollars in thousands)
(Unaudited)
CORE EFFICIENCY RATIO | Three Months Ended | ||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||||||||||
Net interest income | $ | 61,367 | $ | 62,078 | $ | 61,637 | $ | 60,685 | $ | 59,729 | |||||||||
Reported non-interest income | 2,566 | 10,597 | 11,418 | 10,363 | 9,920 | ||||||||||||||
Indemnification asset termination | (9,178 | ) | — | — | — | — | |||||||||||||
Less: Securities gains (losses) | 40 | 54 | (43 | ) | (57 | ) | 90 | ||||||||||||
Core non-interest income | $ | 11,704 | $ | 10,543 | $ | 11,461 | $ | 10,420 | $ | 9,830 | |||||||||
Reported non-interest expense | $ | 46,938 | $ | 47,756 | $ | 48,346 | $ | 49,502 | $ | 52,647 | |||||||||
Less: Stock-based compensation expense | — | — | — | — | 95 | ||||||||||||||
Contingent value right expense | — | — | — | 4 | 116 | ||||||||||||||
Severance expense | 75 | — | 63 | 14 | 111 | ||||||||||||||
Loss on extinguishment of debt | — | — | — | 1,438 | — | ||||||||||||||
Conversion costs and merger tax deductible | 1,107 | 33 | — | — | — | ||||||||||||||
Legal merger non deductible | 580 | — | — | — | — | ||||||||||||||
Restructuring expense | 142 | — | 23 | 178 | 2,341 | ||||||||||||||
Contract termination | — | 4,215 | — | — | — | ||||||||||||||
Conversion and severance expenses (conversion and merger expenses and salaries and employees benefits) | — | 704 | — | — | — | ||||||||||||||
Core non-interest expense | $ | 45,034 | $ | 42,804 | $ | 48,260 | $ | 47,868 | $ | 49,984 | |||||||||
Efficiency ratio* | 73.42 | % | 65.71 | % | 66.18 | % | 69.67 | % | 75.59 | % | |||||||||
Core efficiency ratio** | 61.63 | % | 58.94 | % | 66.02 | % | 67.32 | % | 71.86 | % | |||||||||
* Efficiency Ratio: Non-interest expense / (Non-interest income + Net interest income)
** Core Efficiency Ratio: Core non-interest expense / (Core non-interest income + Net interest income)
- MORE -
CBF Reports First Quarter Results
Page 15
April 22, 2016
CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES (Continuation)
(Dollars and shares in thousands, except per share data)
(Unaudited)
TANGIBLE BOOK VALUE | Three Months Ended | |||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Total shareholders' equity | $ | 996,993 | $ | 986,265 | $ | 1,022,642 | $ | 1,059,346 | $ | 1,054,349 | ||||||||||
Less: goodwill and intangible assets, net of taxes | (143,304 | ) | (143,863 | ) | (144,447 | ) | (145,035 | ) | (145,622 | ) | ||||||||||
Tangible book value* | $ | 853,689 | $ | 842,402 | $ | 878,195 | $ | 914,311 | $ | 908,727 | ||||||||||
Common shares outstanding | 43,189 | 43,143 | 44,466 | 46,440 | 46,632 | |||||||||||||||
Tangible book value per share | $ | 19.77 | $ | 19.53 | $ | 19.75 | $ | 19.69 | $ | 19.49 | ||||||||||
* Tangible book value is equal to book value less goodwill and core deposit intangibles, net of related deferred tax liabilities.
TANGIBLE COMMON EQUITY RATIO | Three Months Ended | |||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Total shareholders' equity | $ | 996,993 | $ | 986,265 | $ | 1,022,642 | $ | 1,059,346 | $ | 1,054,349 | ||||||||||
Less: goodwill and intangible assets | (148,688 | ) | (149,622 | ) | (150,567 | ) | (151,517 | ) | (152,465 | ) | ||||||||||
Tangible common equity | $ | 848,305 | $ | 836,643 | $ | 872,075 | $ | 907,829 | $ | 901,884 | ||||||||||
Total assets | $ | 7,479,798 | $ | 7,449,479 | $ | 7,261,196 | $ | 7,054,501 | $ | 6,976,736 | ||||||||||
Less: goodwill and intangible assets | (148,688 | ) | (149,622 | ) | (150,567 | ) | (151,517 | ) | (152,465 | ) | ||||||||||
Tangible assets | $ | 7,331,110 | $ | 7,299,857 | $ | 7,110,629 | $ | 6,902,984 | $ | 6,824,271 | ||||||||||
Tangible common equity ratio | 11.57 | % | 11.46 | % | 12.26 | % | 13.15 | % | 13.22 | % | ||||||||||
- END -