Attached files
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| 8-K - CAPITAL BANK CORPORATION 8-K 8-8-2012 - CAPITAL BANK CORP | form8k.htm |
Exhibit 99.1
P.O. Box 18949 | Raleigh, NC 27619-8949 | Phone 919.645.6400 | Fax 919.645.6353 | capitalbank-us.com
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 Second Quarter of 2012
RALEIGH, N.C., August 8, 2012 – Capital Bank Corporation (the “Company”) (Nasdaq: CBKN), a majority-owned subsidiary of Capital Bank Financial Corp. (“CBF,” formerly known as North American Financial Holdings, Inc.), today reported financial results for the second quarter of 2012. Operating and financial highlights include the following:
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Net income totaled $2.6 million, or $0.03 per share, in the second quarter of 2012 and totaled $5.4 million, or $0.06 per share, in the six months ended June 30, 2012;
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The Company held a 26% ownership interest in Capital Bank, NA, which has $6.3 billion in assets and operates 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia; and
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The Company increased the equity investment balance in Capital Bank, NA by $2.9 million based on its equity in Capital Bank, NA’s net income and increased the equity investment balance by $1.5 million based on its equity in Capital Bank, NA’s other comprehensive income in the second quarter of 2012.
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“Our team has been working hard in planning for the pending acquisition of Southern Community Financial Corp. While shareholder and regulatory approvals are still pending, Southern Community will expand the Bank’s franchise throughout North Carolina, where we see significant growth opportunities. Our recent renegotiation of the investment agreement to change the consideration mix to 100% cash represents our continued commitment to this strategic complement to our organization and eliminates obstacles on the road to a successful merger,” stated Gene Taylor, Chairman and Chief Executive Officer of the Company and Capital Bank.
“Our strongest quarter to date for organic loan production, successes in resolution of problem assets and continued aggressive deposit repricing resulted in continued improvement in the Bank’s loan mix, net interest margin and profitability. The consolidation of certain duplicative functions during the second quarter is expected to result in further improvement of our efficiency ratio and our overall returns,” commented Chris Marshall, Chief Financial Officer of the Company and Capital Bank.
Equity Method Investment in Capital Bank, NA
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%.
- 1 -
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 June 30, 2012, Capital Bank, NA operated 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia and had total assets of $6.3 billion, total deposits of $5.1 billion and shareholders’ equity of $966.5 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 June 30, 2012, the Company’s investment in Capital Bank, NA totaled $250.6 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 June 30, 2012. In the second quarter of 2012, the Company increased the equity investment balance by $2.9 million based on its equity in Capital Bank, NA’s net income and increased the equity investment balance by $1.5 million based on its equity in Capital Bank, NA’s other comprehensive income.
In the six months ended June 30, 2012, the Company increased the equity investment balance by $6.0 million based on its equity in Capital Bank, NA’s net income and increased the equity investment balance by $921 thousand based on its equity in Capital Bank, NA’s other comprehensive income.
The following table presents summarized financial information for the Company’s equity method investee, Capital Bank, NA, for each period presented:
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Capital Bank, NA
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Three Months
Ended
Jun. 30, 2012
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Six Months
Ended
Jun. 30, 2012
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(Dollars in thousands)
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Interest income
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$
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72,893
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$
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147,025
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Interest expense
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8,000
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16,725
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Net interest income
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64,893
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130,300
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Provision for loan losses
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6,608
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11,984
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Noninterest income
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12,298
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26,912
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Noninterest expense
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52,799
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108,017
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Net income
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11,326
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23,234
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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 second quarter of 2012 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 net interest loss and a negative net interest margin. Net interest income (loss) for the quarter ended June 30, 2012 (Successor) and the quarter ended June 30, 2011 (Successor) totaled ($284) thousand and $15.4 million, respectively. Net interest margin decreased from 4.23% in the quarter ended June 30, 2011 (Successor) to (33.57)% in the quarter ended June 30, 2012 (Successor).
- 2 -
Further, net interest income (loss) for the six months ended June 30, 2012 (Successor), the period of January 29 to June 30, 2011 (Successor) and the period of January 1 to January 28, 2011 (Predecessor) totaled ($561) thousand, $25.5 million and $4.0 million, respectively. The Company’s net interest margin increased from 3.09% in the period of January 1 to January 28, 2011 (Predecessor) to 4.23% for the period of January 29 to June 30, 2011 (Successor), and decreased to (33.16)% for the six months ended June 30, 2012 (Successor) primarily due to the CBF Investment and Bank Merger, respectively. Average interest-earning assets decreased from $1.54 billion in the period of January 1 to January 28, 2011 (Predecessor) to $1.49 billion in the period of January 29 to June 30, 2011 (Successor) and to $3.4 million in the six months ended June 30, 2012 (Successor). The decline in average interest-earning assets in the successor period was primarily related to the Bank Merger, upon which Old Capital Bank’s interest-earning assets and interest-bearing liabilities were deconsolidated from the Company. As of June 30, 2012 (Successor), the Company’s only interest-earning asset was a $3.4 million advance to Capital Bank, NA.
Noninterest Income
Noninterest income for the quarter ended June 30, 2012 (Successor) and the quarter ended June 30, 2011 (Successor) totaled $2.9 million and $2.1 million, respectively. Noninterest income in the second quarter of 2012 was solely related to the Company’s equity income from its investment in Capital Bank, NA.
Further, noninterest income for the six months ended June 30, 2012 (Successor), the period of January 29 to June 30, 2011 (Successor) and the period of January 1 to January 28, 2011 (Predecessor) totaled $6.0 million, $3.3 million and $832 thousand, respectively. Noninterest income in the first half of 2012 was solely related to the Company’s equity income from its investment in Capital Bank, NA.
Noninterest Expense
Noninterest expense for the quarter ended June 30, 2012 (Successor) and the quarter ended June 30, 2011 (Successor) totaled $257 thousand and $12.8 million, respectively. Expenses in the second quarter of 2012 were significantly reduced by the Bank Merger and related deconsolidation of Old Capital Bank.
Further, noninterest expense for the six months ended June 30, 2012 (Successor), the period from January 29 to June 30, 2011 (Successor) and the period from January 1 to January 28, 2011 (Predecessor) totaled $414 thousand, $25.0 million and $4.2 million, respectively. Expenses in the first half of 2012 were significantly reduced by the Bank Merger and related deconsolidation of Old Capital Bank. Additionally, expenses in the period from January 29 to June 30, 2011 (Successor) were impacted by $4.0 million of contract termination fees related to the conversion and integration of the Company’s operations onto a common technology platform utilized across the CBF enterprise. Salaries and benefits expense increased in the period from January 29 to June 30, 2011 (Successor) from the accelerated vesting of stock options and restricted shares at closing of the CBF Investment.
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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.
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CAPITAL BANK CORPORATION
Results of Operations
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Successor Company
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(Dollars in thousands except per share data)
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Three Months
Ended
Jun. 30, 2012
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Three Months
Ended
Mar. 31, 2012
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Three Months
Ended
Dec. 31, 2011
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Three Months
Ended
Sep. 30, 2011
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Three Months
Ended
Jun. 30, 2011
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Interest income
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$ | 85 | $ | 85 | $ | 85 | $ | 85 | $ | 18,990 | ||||||||||
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Interest expense
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369 | 362 | 362 | 355 | 3,551 | |||||||||||||||
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Net interest income (loss)
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(284 | ) | (277 | ) | (277 | ) | (270 | ) | 15,439 | |||||||||||
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Provision for loan losses
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– | – | – | – | 1,283 | |||||||||||||||
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Net interest income (loss) after provision
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(284 | ) | (277 | ) | (277 | ) | (270 | ) | 14,156 | |||||||||||
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Noninterest income
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2,937 | 3,088 | 1,762 | 2,283 | 2,065 | |||||||||||||||
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Noninterest expense
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257 | 157 | 175 | 76 | 12,797 | |||||||||||||||
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Net income before taxes
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2,396 | 2,654 | 1,310 | 1,937 | 3,424 | |||||||||||||||
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Income tax expense (benefit)
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(230 | ) | (89 | ) | (168 | ) | (117 | ) | 1,115 | |||||||||||
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Net income
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$ | 2,626 | $ | 2,743 | $ | 1,478 | $ | 2,054 | $ | 2,309 | ||||||||||
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Earnings per share – basic and diluted
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$ | 0.03 | $ | 0.03 | $ | 0.02 | $ | 0.02 | $ | 0.03 | ||||||||||
End of Period Balances
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Successor Company
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(Dollars in thousands except per share data)
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Jun. 30, 2012
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Mar. 31, 2012
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Dec. 31, 2011
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Sep. 30, 2011
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Jun. 30, 2011
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Total assets
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$ | 255,787 | $ | 251,947 | $ | 249,705 | $ | 248,211 | $ | 248,562 | ||||||||||
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Total earning assets
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3,393 | 3,393 | 3,393 | 3,393 | 3,393 | |||||||||||||||
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Cash and cash equivalents
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985 | 1,820 | 2,163 | 2,435 | 12,477 | |||||||||||||||
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Investment in and advance to Capital Bank, NA
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254,030 | 249,546 | 247,084 | 245,468 | 235,657 | |||||||||||||||
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Subordinated debentures
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19,274 | 19,212 | 19,163 | 19,099 | 19,036 | |||||||||||||||
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Shareholders’ equity
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231,130 | 226,947 | 224,827 | 223,494 | 229,419 | |||||||||||||||
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Per Share Data
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Book value
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$ | 2.69 | $ | 2.65 | $ | 2.62 | $ | 2.60 | $ | 2.67 | ||||||||||
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Tangible book value
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2.30 | 2.25 | 2.22 | 2.22 | 2.25 | |||||||||||||||
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Common shares outstanding
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85,802,164 | 85,802,164 | 85,802,164 | 85,802,164 | 85,802,164 | |||||||||||||||
- 5 -
CAPITAL BANK CORPORATION
Average Balances and Yields/Rates
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Successor Company
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(Dollars in thousands)
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Three Months
Ended
Jun. 30, 2012
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Three Months
Ended
Mar. 31, 2012
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Three Months
Ended
Dec. 31, 2011
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Three Months
Ended
Sep. 30, 2011
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Three Months
Ended
Jun. 30, 2011
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Average Balances
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Total assets
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$ | 254,635 | $ | 251,304 | $ | 244,253 | $ | 248,183 | $ | 1,701,071 | ||||||||||
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Total earning assets
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3,393 | 3,393 | 3,393 | 3,393 | 1,488,645 | |||||||||||||||
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Investment securities
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– | – | – | – | 338,035 | |||||||||||||||
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Loans
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– | – | – | – | 1,097,413 | |||||||||||||||
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Deposits
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– | – | – | – | 1,343,599 | |||||||||||||||
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Borrowings
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– | – | – | – | 93,349 | |||||||||||||||
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Subordinated debentures
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19,253 | 19,191 | 19,142 | 19,078 | 19,323 | |||||||||||||||
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Shareholders’ equity
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229,867 | 226,359 | 224,085 | 228,961 | 231,742 | |||||||||||||||
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Yields/Rates 1
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Yield on earning assets
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10.00 | % | 10.00 | % | 9.94 | % | 9.94 | % | 5.19 | % | ||||||||||
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Cost of interest-bearing liabilities
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7.58 | 7.46 | 7.50 | 7.38 | 1.07 | |||||||||||||||
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Net interest spread
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2.42 | 2.54 | 2.44 | 2.56 | 4.12 | |||||||||||||||
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Net interest margin
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(33.57 | ) | (32.75 | ) | (32.39 | ) | (31.57 | ) | 4.23 | |||||||||||
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1
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Annualized and on a fully taxable equivalent basis.
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- 6 -
CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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Successor Company
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(Dollars in thousands)
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Jun. 30, 2012
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Dec. 31, 2011
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Assets
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Cash and due from banks
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$ | 985 | $ | 2,163 | ||||
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Total cash and cash equivalents
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985 | 2,163 | ||||||
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Equity method investment in Capital Bank, NA
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250,637 | 243,691 | ||||||
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Advance to Capital Bank, NA
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3,393 | 3,393 | ||||||
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Other assets
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772 | 458 | ||||||
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Total assets
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$ | 255,787 | $ | 249,705 | ||||
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Liabilities
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Subordinated debentures
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$ | 19,274 | $ | 19,163 | ||||
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Other liabilities
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5,383 | 5,715 | ||||||
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Total liabilities
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24,657 | 24,878 | ||||||
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Shareholders’ Equity
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Common stock, no par value; 300,000,000 shares authorized; 85,802,164 and shares issued and outstanding
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218,802 | 218,789 | ||||||
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Retained earnings
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10,636 | 5,267 | ||||||
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Accumulated other comprehensive income
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1,692 | 771 | ||||||
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Total shareholders’ equity
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231,130 | 224,827 | ||||||
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Total liabilities and shareholders’ equity
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$ | 255,787 | $ | 249,705 | ||||
- 7 -
CAPITAL BANK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Successor
Company
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Successor
Company
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Predecessor
Company
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(Dollars in thousands except per share data)
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Three Months
Ended
Jun. 30, 2012
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Three Months
Ended
Jun. 30, 2011
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Six Months
Ended
Jun. 30, 2012
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Jan. 29, 2011
to
Jun. 30, 2011
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Jan. 1, 2011
to
Jan. 28, 2011
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Interest income:
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Loans and loan fees
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$ | – | $ | 16,465 | $ | – | $ | 27,521 | $ | 5,479 | ||||||||||
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Investment securities:
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Taxable interest income
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– | 2,216 | – | 3,206 | 391 | |||||||||||||||
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Tax-exempt interest income
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– | 239 | – | 398 | 74 | |||||||||||||||
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Dividends
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– | 30 | – | 59 | – | |||||||||||||||
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Federal funds and other interest income
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85 | 40 | 170 | 87 | 11 | |||||||||||||||
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Total interest income
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85 | 18,990 | 170 | 31,271 | 5,955 | |||||||||||||||
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Interest expense:
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Deposits
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– | 2,786 | – | 4,560 | 1,551 | |||||||||||||||
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Borrowings and subordinated debentures
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369 | 765 | 731 | 1,251 | 445 | |||||||||||||||
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Total interest expense
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369 | 3,551 | 731 | 5,811 | 1,996 | |||||||||||||||
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Net interest income
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(284 | ) | 15,439 | (561 | ) | 25,460 | 3,959 | |||||||||||||
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Provision for loan losses
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– | 1,283 | – | 1,450 | 40 | |||||||||||||||
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Net interest income (loss) after provision for loan losses
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(284 | ) | 14,156 | (561 | ) | 24,010 | 3,919 | |||||||||||||
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Noninterest income:
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Equity income from investment in Capital Bank, NA
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2,937 | – | 6,025 | – | – | |||||||||||||||
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Service charges and other fees
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– | 807 | – | 1,355 | 291 | |||||||||||||||
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Bank card services
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– | 547 | – | 847 | 174 | |||||||||||||||
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Mortgage origination and other loan fees
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– | 255 | – | 518 | 210 | |||||||||||||||
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Brokerage fees
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– | 212 | – | 308 | 78 | |||||||||||||||
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Bank-owned life insurance
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– | 114 | – | 134 | 10 | |||||||||||||||
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Other
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– | 130 | – | 155 | 69 | |||||||||||||||
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Total noninterest income
|
2,937 | 2,065 | 6,025 | 3,317 | 832 | |||||||||||||||
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Noninterest expense:
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Salaries and employee benefits
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– | 5,568 | – | 9,525 | 1,977 | |||||||||||||||
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Occupancy
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– | 1,830 | – | 2,970 | 548 | |||||||||||||||
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Furniture and equipment
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– | 857 | – | 1,401 | 275 | |||||||||||||||
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Data processing and telecommunications
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– | 635 | – | 911 | 180 | |||||||||||||||
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Advertising and public relations
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– | 144 | – | 325 | 131 | |||||||||||||||
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Office expenses
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– | 269 | – | 498 | 93 | |||||||||||||||
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Professional fees
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– | 208 | – | 543 | 190 | |||||||||||||||
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Business development and travel
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– | 304 | – | 550 | 87 | |||||||||||||||
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Amortization of other intangible assets
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– | 287 | – | 478 | 62 | |||||||||||||||
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ORE losses and miscellaneous loan costs
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– | 1,085 | – | 1,608 | 176 | |||||||||||||||
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Directors’ fees
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– | 53 | – | 93 | 68 | |||||||||||||||
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FDIC deposit insurance
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– | 513 | – | 1,076 | 266 | |||||||||||||||
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Contract termination fees
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– | 374 | – | 3,955 | – | |||||||||||||||
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Other
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257 | 670 | 414 | 1,093 | 102 | |||||||||||||||
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Total noninterest expense
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257 | 12,797 | 414 | 25,026 | 4,155 | |||||||||||||||
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Net income before taxes
|
2,396 | 3,424 | 5,050 | 2,301 | 596 | |||||||||||||||
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Income tax expense (benefit)
|
(230 | ) | 1,115 | (319 | ) | 566 | – | |||||||||||||
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Net income
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2,626 | 2,309 | 5,369 | 1,735 | 596 | |||||||||||||||
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Dividends and accretion on preferred stock
|
– | – | – | – | 861 | |||||||||||||||
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Net income (loss) attributable to common shareholders
|
$ | 2,626 | $ | 2,309 | $ | 5,369 | $ | 1,735 | $ | (265 | ) | |||||||||
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Earnings (loss) per common share – basic
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$ | 0.03 | $ | 0.03 | $ | 0.06 | $ | 0.02 | $ | (0.02 | ) | |||||||||
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Earnings (loss) per common share – diluted
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$ | 0.03 | $ | 0.03 | $ | 0.06 | $ | 0.02 | $ | (0.02 | ) | |||||||||
- 8 -
CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
Tax Equivalent Basis 1
|
Successor Company
|
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(Dollars in thousands)
|
Three Months Ended
Jun. 30, 2012
|
Three Months Ended
Mar. 31, 2012
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Three Months Ended
Jun. 30, 2011
|
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Average
Balance
|
Amount
Earned
|
Average
Rate
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
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Assets
|
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Loans 2
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$ | – | $ | – | – | % | $ | – | $ | – | – | % | $ | 1,098,266 | $ | 16,579 | 6.05 | % | ||||||||||||||||||
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Investment securities 3
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– | – | – | – | – | – | 334,230 | 2,639 | 3.16 | |||||||||||||||||||||||||||
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Interest-bearing deposits
|
– | – | – | – | – | – | 56,149 | 40 | 0.29 | |||||||||||||||||||||||||||
|
Advance to Capital Bank, NA
|
3,393 | 85 | 10.00 | 3,393 | 85 | 10.00 | – | – | – | |||||||||||||||||||||||||||
|
Total interest-earning assets
|
3,393 | $ | 85 | 10.00 | % | 3,393 | $ | 85 | 10.00 | % | 1,488,645 | $ | 19,258 | 5.19 | % | |||||||||||||||||||||
|
Cash and due from banks
|
1,239 | 1,950 | 16,587 | |||||||||||||||||||||||||||||||||
|
Other assets
|
250,003 | 245,961 | 195,839 | |||||||||||||||||||||||||||||||||
|
Total assets
|
$ | 254,635 | $ | 251,304 | $ | 1,701,071 | ||||||||||||||||||||||||||||||
|
Liabilities and Equity
|
||||||||||||||||||||||||||||||||||||
|
NOW and money market accounts
|
$ | – | $ | – | – | % | $ | – | $ | – | – | % | $ | 345,307 | $ | 666 | 0.77 | % | ||||||||||||||||||
|
Savings accounts
|
– | – | – | – | – | – | 32,241 | 10 | 0.12 | |||||||||||||||||||||||||||
|
Time deposits
|
– | – | – | – | – | – | 843,725 | 2,110 | 1.00 | |||||||||||||||||||||||||||
|
Total interest-bearing deposits
|
– | – | – | – | – | – | 1,221,273 | 2,786 | 0.91 | |||||||||||||||||||||||||||
|
Borrowings
|
– | – | – | – | – | – | 93,349 | 410 | 1.76 | |||||||||||||||||||||||||||
|
Subordinated debentures
|
19,253 | 369 | 7.58 | 19,191 | 362 | 7.46 | 19,323 | 355 | 7.27 | |||||||||||||||||||||||||||
|
Total interest-bearing liabilities
|
19,253 | $ | 369 | 7.58 | % | 19,191 | $ | 362 | 7.46 | % | 1,333,945 | $ | 3,551 | 1.07 | % | |||||||||||||||||||||
|
Noninterest-bearing deposits
|
– | – | 122,326 | |||||||||||||||||||||||||||||||||
|
Other liabilities
|
5,515 | 5,754 | 13,058 | |||||||||||||||||||||||||||||||||
|
Total liabilities
|
24,768 | 24,945 | 1,469,329 | |||||||||||||||||||||||||||||||||
|
Shareholders’ equity
|
229,867 | 226,359 | 231,742 | |||||||||||||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$ | 254,635 | $ | 251,304 | $ | 1,701,071 | ||||||||||||||||||||||||||||||
|
Net interest spread 4
|
2.42 | % | 2.54 | % | 4.12 | % | ||||||||||||||||||||||||||||||
|
Tax equivalent adjustment
|
$ | – | $ | – | $ | 268 | ||||||||||||||||||||||||||||||
|
Net interest income and net interest margin 5
|
$ | (284 | ) | (33.57 | )% | $ | (277 | ) | (32.75 | )% | $ | 15,707 | 4.23 | % | ||||||||||||||||||||||
|
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.
|
- 9 -
CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
Tax Equivalent Basis 1
|
Successor Company
|
Predecessor Company
|
|||||||||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
Six Months Ended
Jun. 30, 2012
|
Period of
Jan. 29 to Jun. 30, 2011
|
Period of
Jan. 1 to Jan. 28, 2011
|
|||||||||||||||||||||||||||||||||
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
||||||||||||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||||||||||||||
|
Loans 2
|
$ | – | $ | – | – | % | $ | 1,102,487 | $ | 27,734 | 6.12 | % | $ | 1,253,296 | $ | 5,530 | 5.20 | % | ||||||||||||||||||
|
Investment securities 3
|
– | – | – | 298,283 | 3,893 | 3.13 | 225,971 | 504 | 2.68 | |||||||||||||||||||||||||||
|
Interest-bearing deposits
|
– | – | – | 88,465 | 87 | 0.24 | 63,350 | 11 | 0.20 | |||||||||||||||||||||||||||
|
Advance to Capital Bank, NA
|
3,393 | 170 | 10.00 | – | – | – | – | – | – | |||||||||||||||||||||||||||
|
Total interest-earning assets
|
3,393 | $ | 170 | 10.00 | % | 1,489,235 | $ | 31,714 | 5.18 | % | 1,542,617 | $ | 6,045 | 4.61 | % | |||||||||||||||||||||
|
Cash and due from banks
|
1,594 | 16,503 | 16,112 | |||||||||||||||||||||||||||||||||
|
Other assets
|
247,983 | 191,902 | 34,021 | |||||||||||||||||||||||||||||||||
|
Total assets
|
$ | 252,970 | $ | 1,697,640 | $ | 1,592,750 | ||||||||||||||||||||||||||||||
|
Liabilities and Equity
|
||||||||||||||||||||||||||||||||||||
|
NOW and money market accounts
|
$ | – | $ | – | – | % | $ | 344,867 | $ | 1,084 | 0.76 | % | $ | 334,668 | $ | 211 | 0.74 | % | ||||||||||||||||||
|
Savings accounts
|
– | – | – | 31,958 | 16 | 0.12 | 30,862 | 3 | 0.11 | |||||||||||||||||||||||||||
|
Time deposits
|
– | – | – | 846,753 | 3,460 | 0.99 | 870,146 | 1,337 | 1.81 | |||||||||||||||||||||||||||
|
Total interest-bearing deposits
|
– | – | – | 1,223,578 | 4,560 | 0.91 | 1,235,676 | 1,551 | 1.48 | |||||||||||||||||||||||||||
|
Borrowings
|
– | – | – | 95,414 | 664 | 1.69 | 120,032 | 343 | 3.36 | |||||||||||||||||||||||||||
|
Subordinated debentures
|
19,222 | 731 | 7.52 | 19,417 | 587 | 7.26 | 34,323 | 102 | 3.50 | |||||||||||||||||||||||||||
|
Total interest-bearing liabilities
|
19,222 | $ | 731 | 7.52 | % | 1,338,410 | $ | 5,811 | 1.06 | % | 1,390,031 | $ | 1,996 | 1.69 | % | |||||||||||||||||||||
|
Noninterest-bearing deposits
|
– | 118,897 | 114,660 | |||||||||||||||||||||||||||||||||
|
Other liabilities
|
5,635 | 10,683 | 9,635 | |||||||||||||||||||||||||||||||||
|
Total liabilities
|
24,857 | 1,467,990 | 1,514,326 | |||||||||||||||||||||||||||||||||
|
Shareholders’ equity
|
228,113 | 229,650 | 78,424 | |||||||||||||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$ | 252,970 | $ | 1,697,640 | $ | 1,592,750 | ||||||||||||||||||||||||||||||
|
Net interest spread 4
|
2.48 | % | 4.13 | % | 2.92 | % | ||||||||||||||||||||||||||||||
|
Tax equivalent adjustment
|
$ | – | $ | 443 | $ | 90 | ||||||||||||||||||||||||||||||
|
Net interest income and net interest margin 5
|
$ | (561 | ) | (33.16 | )% | $ | 25,903 | 4.23 | % | $ | 4,049 | 3.09 | % | |||||||||||||||||||||||
|
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.
|
- 10 -