Market Overview

Capital Bank Corporation Announces Financial Results for the Fourth Quarter and Full Year of 2011

Capital Bank Corporation Announces Financial Results for the Fourth Quarter and Full Year of 2011

PR Newswire

RALEIGH, N.C., April 9, 2012 /PRNewswire/ -- Capital Bank Corporation (the "Company") (Nasdaq: CBKN), a majority-owned subsidiary of Capital Bank Financial Corp. ("CBF"; formerly North American Financial Holdings, Inc.), today reported financial results for the fourth quarter and full year of 2011. Operating and financial highlights include the following:

  • Net income totaled $1.5 million, or $0.02 per share, in the fourth quarter of 2011 and totaled $5.3 million, or $0.06 per share, in the successor period from January 29 to December 31, 2011; and

  • Following the merger of GreenBank, the wholly-owned subsidiary of Green Bankshares, Inc. ("Green Bankshares"), into Capital Bank, NA, the Company held a 26% ownership interest in Capital Bank, NA, which has $6.5 billion in assets and operates 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia.

"Thanks to the hard work of team mates across the company, I am very proud to be able to say that today, Capital Bank, NA is a single bank, with 143 branches operating under one brand, offering a common set of products and processing on one IT system. That is a huge accomplishment for us in such a short period of time," stated Gene Taylor, Chairman and Chief Executive Officer of CBF and Capital Bank Corporation.

"We are pleased with continued success in generating new loans and core deposits. These activities are helping customers achieve their goals and will lead to higher profitability for the company," commented Chris Marshall, Chief Financial Officer of CBF and Capital Bank Corporation.

Bank Mergers

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 (the "Bank Merger"). In connection with the Bank Merger, NAFH National Bank changed its name to Capital Bank, NA. On September 7, 2011, CBF 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, CBF, TIB Financial Corp. ("TIB Financial") and Green Bankshares. CBF 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. Previously, 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 CBF having a direct ownership of 19%, TIB Financial owning 21%, and Green Bankshares owning the remaining 34%.

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 deconsolidation 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, CBF, 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. As of December 31, 2011, Capital Bank, NA operated 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia and had total assets of $6.5 billion, total deposits of $5.1 billion and shareholders' equity of $939.8 million.

The Company reports its investment in Capital Bank, NA on the Consolidated Balance Sheet as an equity method investment in that entity. As of December 31, 2011, the Company's investment in Capital Bank, NA totaled $243.7 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 December 31, 2011. In the quarter ended December 31, 2011, the Company increased the equity investment balance by $1.8 million based on its equity in Capital Bank, NA's net income and decreased the equity investment balance by $148 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, for each period presented:



(Dollars in thousands)



Three Months
Ended
Dec. 31, 2011



Jun. 30, 2011
to
Dec. 31, 2011














Interest income


$

74,163


$

137,508




Interest expense



9,266



17,810




Net interest income



64,897



119,698




Provision for loan losses



16,790



28,636




Noninterest income



16,105



28,710




Noninterest expense



53,271



97,754




Net income


$

6,797


$

13,984






Potential Merger of the Company and CBF

On September 1, 2011, the Boards of Directors of CBF 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 CBF), of the Company with and into CBF, with CBF 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 CBF or the Company, will be converted into the right to receive 0.1354 of a share of CBF 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 CBF is the majority shareholder of the Company, CBF will be able to determine the outcome of the shareholder vote needed to approve the merger.

Net Interest Income

Net interest income in the fourth quarter of 2011 was significantly impacted by the Bank Merger, upon which Old Capital Bank's earning assets and interest-bearing liabilities were deconsolidated 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 December 31, 2011 (Successor) and the quarter ended December 31, 2010 (Predecessor) totaled ($277) thousand and $12.3 million, respectively. Net interest margin decreased from 3.16% in the fourth quarter of 2010 (Predecessor) to (32.39)% in the fourth quarter of 2011 (Successor) primarily due to the Bank Merger.

Further, net interest income for the period of January 29 to December 31, 2011 (Successor), the period of January 1 to January 28, 2011 (Predecessor), and the year ended December 31, 2010 (Predecessor) totaled $24.9 million, $4.0 million and $51.0 million, respectively. Net interest margin increased from 3.27% in the year ended December 31, 2010 (Predecessor) to 4.13% for the period of January 29 to December 31, 2011 (Successor) primarily due to a decline in funding costs as the average rate on total interest-bearing liabilities fell from 1.88% to 1.17% over that period. Average earning assets decreased from $1.60 billion in the year ended December 31, 2010 (Predecessor) to $1.54 billion in the period of January 1 to January 28, 2011 (Predecessor) to $670.7 million in the period of January 29 to December 31, 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 December 31, 2011 (Successor). Provision for loan losses for the quarter ended December 31, 2010 (Predecessor) totaled $20.0 million. In addition, provision for loan losses for the period of January 29 to December 31, 2011 (Successor), the period of January 1 to January 28, 2011 (Predecessor), and the year ended December 31, 2010 (Predecessor) totaled $1.5 million, $40 thousand and $58.5 million, respectively. The loan loss provision in the successor period reflects $752 thousand of estimated losses inherent in loans originated subsequent to the CBF investment date, $359 thousand of impairment related to probable decreases in cash flows expected to be collected on certain purchase credit-impaired loan pools, and $339 thousand of losses on acquired non-PCI loans.

Noninterest Income

Noninterest income for the quarter ended December 31, 2011 (Successor) and the quarter ended December 31, 2010 (Predecessor) totaled $1.8 million and $8.0 million, respectively. Noninterest income in the fourth 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 December 31, 2011 (Successor), the period of January 1 to January 28, 2011 (Predecessor), and the year ended December 31, 2010 (Predecessor) totaled $7.4 million, $832 thousand and $15.5 million, respectively. Noninterest income in the successor period was significantly impacted by the Company's $4.0 million of equity income from its investment in Capital Bank, NA. Additionally, noninterest income in the year ended December 31, 2010 (Predecessor) benefited from $5.9 million of gains recorded on the sale of investment securities while no gains or losses were recognized in the period from January 29 to December 31, 2011 (Successor) or the period from January 1 to January 28, 2011 (Predecessor).

Noninterest Expense

Noninterest expense for the quarter ended December 31, 2011 (Successor) and the quarter ended December 31, 2010 (Predecessor) totaled $175 thousand and $15.1 million, respectively. Expenses in the successor period were significantly reduced by the Bank Merger and related deconsolidation of Old Capital Bank.

Further, noninterest expense for the period from January 29 to December 31, 2011 (Successor), the period from January 1 to January 28, 2011 (Predecessor) and the year ended December 31, 2010 (Predecessor) totaled $25.3 million, $4.2 million and $54.3 million, respectively. Additionally, expenses in the year ended December 31, 2011 were significantly reduced by the Bank Merger and related deconsolidation of Old Capital Bank. Expenses in the period from January 29 to December 31, 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 CBF enterprise. This system conversion is intended to create operating efficiencies and better position the Company for future growth.

Measurement Period Adjustments

Financial results for the year ended 2011 were significantly impacted by the controlling investment in the Company by CBF. The Company elected to apply push-down accounting. Accordingly, the Company's assets and liabilities were adjusted to estimated fair value at the CBF investment date. During the fourth quarter of 2011, the Company was still in the process of completing its fair value analysis (not to exceed one year from the acquisition date) of assets and liabilities, and the Company made adjustments which are retrospectively reflected herein.

The measurement period adjustments were primarily due to a $30.7 million decrease in the acquisition date estimated fair values of certain acquired loans based on further analysis of estimated credit losses and other relevant facts and circumstances existing as of the acquisition date. This adjustment resulted in the Company retrospectively increasing net income by $1.0 million, net of tax, for the second quarter of 2011 (Successor) and retrospectively increasing the equity income from the investment in Capital Bank, NA by $114,000 in the third quarter of 2011 (Successor).

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 CBF 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.

CAPITAL BANK CORPORATION

Results of Operations




Successor Company


Predecessor Company

(Dollars in thousands except per share data)


Three Months
Ended
Dec. 31, 2011


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























Interest income


$

              85


$

                85


$

           18,990


$

         12,281



$

                      5,955


$

                           18,327


Interest expense



362



355



3,551



2,260




1,996



6,040


Net interest income (loss)



(277)



(270)



15,439



10,021




3,959



12,287


Provision for loan losses







1,283



167




40



20,011


Net interest income (loss) after
   provision



(277)



(270)



14,156



9,854




3,919



(7,724)


Noninterest income



1,762



2,283



2,065



1,252




832



8,004


Noninterest expense



175



76



12,797



12,229




4,155



15,129


Net income (loss) before taxes



1,310



1,937



3,424



(1,123)




596



(14,849)


Income tax expense (benefit)



(168)



(117)



1,115



(549)






18,634


Net income (loss)



1,478



2,054



2,309



(574)




596



(33,483)


Dividends and accretion on
   preferred stock












861



589


Net income (loss) attributable to
   common shareholders


$

1,478


$

2,054


$

2,309


$

(574)



$

(265)


$

(34,072)























Earnings (loss) per share – basic
   and diluted


$

0.02


$

0.02


$

0.03


$

(0.01)



$

(0.02)


$

(2.59)





End of Period Balances




Successor
Company


Predecessor
Company


(Dollars in thousands except per share data)


Dec. 31, 2011


Sep. 30, 2011


Jun. 30, 2011


Mar. 31, 2011



Dec. 31, 2010




















Total assets


$

249,742


$

248,249


$

248,562


$

1,702,798



$

1,585,547


Total earning assets



3,393



3,393



3,393



1,500,664




1,537,863


Cash and cash equivalents



2,163



2,435



12,477



116,650




66,745


Investment securities









304,902




223,292


Loans









1,094,558




1,254,479


Allowance for loan losses









167




36,061


Investment in and advance to Capital Bank, NA



247,121



245,506



235,657







Intangible assets









53,525




1,774


Deposits









1,349,661




1,343,286


Borrowings









93,513




121,000


Subordinated debentures



19,163



19,099



19,036



19,905




34,323


Shareholders' equity



224,864



223,532



229,419



228,760




76,688




















Per Share Data


















Book value


$

2.62


$

2.61


$

2.67


$

2.68



$

2.75


Tangible book value



2.23



2.22



2.25



2.07




2.67




















Common shares outstanding



85,802,164



85,802,164



85,802,164



85,489,260




12,877,846





CAPITAL BANK CORPORATION

Average Balances and Yields/Rates




Successor Company


Predecessor Company

(Dollars in thousands)


Three Months
Ended
Dec. 31, 2011


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























Average Balances





















Total assets


$

244,291


$

248,183


$

1,701,071


$

1,692,347



$

1,592,750


$

1,648,467


Total earning assets



3,393



3,393



1,488,645



1,490,146




1,542,617



1,577,651


Investment securities







338,035



242,622




223,854



198,524


Loans







1,097,413



1,107,666




1,249,787



1,295,748


Deposits







1,343,599



1,340,741




1,350,336



1,366,905


Borrowings







93,349



98,599




120,032



126,130


Subordinated debentures



19,142



19,078



19,323



19,563




34,323



34,323


Shareholders' equity



224,843



228,961



231,742



226,423




78,724



110,788























Yields/Rates 1





















Yield on earning assets



9.94%



9.94%



5.19%



5.17%




4.61%



4.68%


Cost of interest-bearing liabilities



7.50



7.38



1.07



1.04




1.69



1.71


Net interest spread



2.44



2.56



4.12



4.13




2.92



2.97


Net interest margin



(32.39)



(31.57)



4.23



4.23




3.09



3.16


1

Annualized and on a fully taxable equivalent basis.




CAPITAL BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)




Successor
Company



Predecessor
Company


(Dollars in thousands)


Dec. 31, 2011



Dec. 31, 2010











Assets









Cash and cash equivalents:









Cash and due from banks


$

2,163



$

13,646


Interest-bearing deposits with banks






53,099


Total cash and cash equivalents



2,163




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



247,121





Other real estate






18,334


Premises and equipment, net






25,034


Other intangible assets, net






1,774


Other assets



458




24,957


Total assets


$

249,742



$

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



19,163




34,323


Other liabilities



5,715




10,250


Total liabilities



24,878




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



218,826




145,594


Retained earnings (accumulated deficit)



5,267




(108,027)


Accumulated other comprehensive income (loss)



771




(1,297)


Total shareholders' equity



224,864




76,688


Total liabilities and shareholders' equity


$

249,742



$

1,585,547





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
Dec. 31, 2011



Three Months
Ended
Dec. 31, 2010


Jan. 29, 2011
to
Dec. 31, 2011



Jan. 1, 2011
to
Jan. 28, 2011


Year
Ended
Dec. 31, 2010





















Interest income:



















Loans and loan fees


$

               –



$

16,394


$

      27,521



$

        5,479


$

      68,474


Investment securities:



















Taxable interest income






1,632



3,206




391



7,483


Tax-exempt interest income






227



398




74



1,596


Dividends






22



59






80


Federal funds and other interest income



85




52



257




11



89


Total interest income



85




18,327



31,441




5,955



77,722


Interest expense:



















Deposits






4,644



4,560




1,551



21,082


Borrowings and subordinated debentures



362




1,396



1,968




445



5,677


Total interest expense



362




6,040



6,528




1,996



26,759


Net interest income (loss)



(277)




12,287



24,913




3,959



50,963


Provision for loan losses






20,011



1,450




40



58,545


Net interest income (loss) after
   provision for loan losses



(277)




(7,724)



23,463




3,919



(7,582)


Noninterest income:



















Service charges and other fees






843



1,355




291



3,311


Bank card services






541



847




174



2,020


Mortgage origination and other loan fees






753



518




210



1,861


Brokerage fees






220



308




78



963


Bank-owned life insurance






67



134




10



699


Equity income from investment in Capital
   Bank, NA



1,762






4,045







Net gain on sale of investment securities






5,344








5,855


Other






236



155




69



840


Total noninterest income



1,762




8,004



7,362




832



15,549


Noninterest expense:



















Salaries and employee benefits






6,038



9,525




1,977



22,675


Occupancy






1,488



2,970




548



5,906


Furniture and equipment






871



1,401




275



3,183


Data processing and telecommunications






562



911




180



2,092


Advertising and public relations






423



325




131



1,887


Office expenses






320



498




93



1,260


Professional fees






729



543




190



2,514


Business development and travel






413



550




87



1,350


Amortization of other intangible assets






232



478




62



937


ORE losses and miscellaneous loan costs






1,148



1,608




176



5,006


Directors' fees






233



93




68



1,061


FDIC deposit insurance






1,818



1,076




266



3,846


Contract termination fees








3,955







Other



175




854



1,344




102



2,592


Total noninterest expense



175




15,129



25,277




4,155



54,309


Net income (loss) before taxes



1,310




(14,849)



5,548




596



(46,342)


Income tax expense (benefit)



(168)




18,634



281






15,124


Net income (loss)



1,478




(33,483)



5,267




596



(61,466)


Dividends and accretion on preferred stock






589






861



2,355


Net income (loss) attributable to common shareholders


$

1,478



$

(34,072)


$

5,267



$

(265)


$

(63,821)





















Earnings (loss) per common share – basic


$

0.02



$

(2.59)


$

0.06



$

(0.02)


$

(4.98)


Earnings (loss) per common share – diluted


$

0.02



$

(2.59)


$

0.06



$

(0.02)


$

(4.98)





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
Dec. 31, 2011


Three Months Ended
Sep. 30, 2011



Three Months Ended
Dec. 31, 2010




Average Balance


Amount Earned


Average Rate


Average Balance


Amount Earned


Average Rate



Average Balance


Amount Earned


Average Rate
































Assets






























Loans 2


$


$



–%


$


$



–%



$

1,303,147


$

16,545



5.04%


Investment securities 3
















191,877



1,999



4.17


Interest-bearing deposits
















82,627



52



0.25


Advance to Capital Bank, NA



3,393



85



9.94



3,393



85



9.94









Total interest-earning assets



3,393


$

85



9.94%



3,393


$

85



9.94%




1,577,651


$

18,596



4.68%


Cash and due from banks



2,318









9,268










18,044








Other assets



238,580









235,522










52,772








Total assets


$

244,291








$

248,183









$

1,648,467






































Liabilities and Equity






























NOW and money market accounts


$


$



–%


$


$



–%



$

319,250


$

626



0.78%


Savings accounts
















30,913



10



0.13


Time deposits
















889,153



4,008



1.79


Total interest-bearing deposits
















1,239,316



4,644



1.49


Borrowings
















126,130



1,095



3.44


Subordinated debentures



19,142



362



7.50



19,078



355



7.38




34,323



301



3.48


Total interest-bearing liabilities



19,142


$

362



7.50%



19,078


$

355



7.38%




1,399,769


$

6,040



1.71%


Noninterest-bearing deposits




















127,589








Other liabilities



306









144










10,321








Total liabilities



19,448









19,222










1,537,679








Shareholders' equity



224,843









228,961










110,788








Total liabilities and shareholders' equity


$

244,291








$

248,183









$

1,648,467






































Net interest spread 4









2.44

%








2.56%










2.97%


Tax equivalent adjustment





$








$









$

269





Net interest income and net interest margin 5





$

(277)



(32.39)%





$

(270)



(31.57)%






$

12,556



3.16%

































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.




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 Dec. 31, 2011


Period of
Jan. 1 to Jan. 28, 2011


Year Ended
Dec. 31, 2010




Average
Balance


Amount
Earned


Average
Rate



Average
Balance


Amount
Earned


Average
Rate


Average
Balance


Amount
Earned


Average
Rate


Assets






























Loans 2


$

495,129


$

27,734



6.12%



$

1,253,296


$

5,530



5.20%


$

1,353,191


$

69,084



5.11%


Investment securities 3



133,960



3,893



3.17




225,971



504



2.68



213,402



9,986



4.68


Interest-bearing deposits



39,730



87



0.24




63,350



11



0.20



38,003



89



0.23


Advance to Capital Bank, NA



1,869



170



9.94















Total interest-earning assets



670,688


$

31,884



5.20%




1,542,617


$

6,045



4.61%



1,604,596


$

79,159



4.93%


Cash and due from banks



10,603










16,112









18,149








Other assets



214,626










34,021









68,910








Total assets


$

895,917









$

1,592,750








$

1,691,655






































Liabilities and Equity






























NOW and money market accounts


$

154,880


$

1,084



0.76%



$

334,668


$

211



0.74%


$

327,811


$

2,794



0.85%


Savings accounts



14,352



16



0.12




30,862



3



0.11



30,555



41



0.13


Time deposits



380,278



3,460



0.99




870,146



1,337



1.81



878,068



18,247



2.08


Total interest-bearing deposits



549,510



4,560



0.91




1,235,676



1,551



1.48



1,236,434



21,082



1.71


Borrowings



42,851



664



1.69




120,032



343



3.36



150,207



4,541



3.02


Subordinated debentures



19,248



1,304



7.40




34,323



102



3.50



33,550



1,131



3.37


Repurchase agreements
















1,564



5



0.32


Total interest-bearing liabilities



611,609


$

6,528



1.17%




1,390,031


$

1,996



1.69%



1,421,755


$

26,759



1.88%


Noninterest-bearing deposits



53,397










114,660









130,944








Other liabilities



4,922










9,635









10,519








Total liabilities



669,928










1,514,326









1,563,218








Shareholders' equity



225,989










78,424









128,437








Total liabilities and shareholders' equity


$

895,917









$

1,592,750








$

1,691,655






































Net interest spread 4









4.03%










2.92%









3.05%


Tax equivalent adjustment





$

443









$

90








$

1,437





Net interest income and net interest margin 5





$

25,356



4.13%






$

4,049



3.09%





$

52,400



3.27%

































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.




SOURCE Capital Bank Corporation

 

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