Market Overview

Capital Bank Reports 31% Growth in Pre-Tax Income


Capital Bank (OTCBB:CBJC) today announced results of operations for the third quarter of 2012 marked by exceptional growth in pre-tax income, strong growth in loans and continued asset expansion. Assets and deposits expanded 13% to $130.8 million and $113.3 million respectively while loans swelled an impressive 35%, or $23.1 million, to $88.4 million. Pre-tax net income through the third quarter grew 31% to over $1 million compared to the same period last year. The Bank became taxable last year and recognized tax expense of $429,000 through the third quarter resulting in net year to date after tax income of $620,000. The Bank is continuing to expand its footprint in Southern California and will open a loan production office in San Diego County sometime next year.

J.M. “Mike” Justice Jr., President & Chief Executive Officer stated “I continue to be very pleased with our ongoing growth and performance. We have been successful in expanding our loan portfolio by 35% this past year, while still maintaining our conservative underwriting standards, producing a 26% increase in net interest income and reducing our need for loan sale premium income. This approach produces a dependable and ongoing income stream which has resulted in a 31% increase in pre-tax income. Our continued strong growth in assets and deposits combined with ongoing and expanding profitability is a testament to the hard work and dedication of our entire team. The prospects for further growth, expansion and profitability are bright for our Bank. The ongoing consolidation of banks in the communities we serve provides opportunities for us to garner further market share as bankers become displaced and customers become dissatisfied. A loan production office in San Diego County is planned for some time next year.” Mr. Justice continued “Our capital position continues to be exceptionally strong with total risk based capital of almost 20%, double the regulatory standard of 10% to be considered well capitalized. We continue to carry the 5 Star Rating of Excellence from the nationally recognized independent bank rating firm of Bauer Financial, which is indicative of the safety of our Bank for our depositors. The strength of our growing capital base driven by ongoing earnings, combined with the quality of our balance sheet should provide comfort to our customers that we are here for them today, tomorrow and for many years to come.”

Mr. Justice continued “Our solid profitability, combined with the growth of our fortress like balance sheet, supported by a strong capital base and growing market share have been noted by the capital markets; we are very pleased with our stock which continues to out-perform our peers.”

John R. McGill, Senior Executive Vice President & Chief Operating Officer stated “We are very optimistic about our expansion opportunities, particularly in San Diego County. Mr. Justice and I have deep and productive roots in this market dating back to the mid 1980's. This, combined with the extensive market knowledge and depth of experience of our San Diego County team led by Senior Vice President John Penrith, will become a formidable force in this consolidating banking market.” Mr. McGill continued; “Our San Diego team will further enhance our highly productive U.S. Small Business Administration Loan Department which continues to be one of the most active and productive SBA lenders in the State and is in the top 100 in the Nation. Our SBA team has done an exceptional job providing the much needed financing to fuel job growth for the communities we serve. We have money to lend.” McGill commented further “Our success in achieving solid profitability, building a quality balance sheet, and leveraging our strong capital base is attributable to the dedication of our employees, the support of committed directors, shareholders and our broadening base of loyal customers. We are thankful for their ongoing confidence and support.”

Capital Bank is dedicated to being known as the Premier Business and Professional Bank in the markets we serve by providing innovative financial solutions tailored to the needs of our customers while exceeding expectations and producing superior shareholder value that become solutions recognized for…”Banking Outside the Box”.

For Additional Information visit our website at:

Stock Symbol: OTCBB:CBJC

Market Makers:

Crowell Weedon & Company
Contact: Steve Arrigo, Senior Vice President (949) 644-1890
Raymond James & Associates
Contact: Doug Deubel, Vice President (888) 734-0540

Bauer Financial:

Information contained herein may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Bank's earnings in future periods. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the Bank's operations, pricing, products and services. The Bank undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.




(All figures in thousands) as of:


Balance Sheet

9/30/12 9/30/11 Change %
Total Assets $ 130,800 $ 115,900 13%
Total Deposits $ 113,328 $ 100,342 13%
Gross Loans $ 88,376 $ 65,286 35%
Total Shareholders' Equity $ 15,914 $ 14,794 8%

Capital Bank
J.M. ”Mike” Justice Jr., President & C.E.O.
John R. McGill, Senior Executive Vice President & C.O.O.

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