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8-K - FORM 8-K - Capital Bank Financial Corp.f8k_013013.htm
EX-99.2 - EXHIBIT 99.2 - Capital Bank Financial Corp.exh_992.htm
Exhibit 99.1
 


CONTACT:
Kenneth A. Posner
Chief of Investment Analytics
Phone: (704) 554-5901
E-mail: Kposner@cbfcorp.com


CAPITAL BANK FINANCIAL CORP. REPORTS FOURTH-QUARTER NET INCOME OF $0.10 AND CORE NET INCOME OF $0.17 PER DILUTED SHARE

Coral Gables, Fla. - (Jan. 30, 2013) - Capital Bank Financial Corp. (Nasdaq: CBF) today reported fourth quarter 2012 net income of $5.3 million, or $0.10 per diluted share compared with net income of $37.8 million or $0.75 per diluted share, for the third quarter of 2012 (which included a $34.0 million tax benefit) and net income of $1.4 million, or $0.02 per diluted share, for the fourth quarter of 2011. Results for the fourth quarter of 2012 included $3.8 million of non-cash equity compensation associated with original founder awards, $2.4 million of severance and conversion related expense associated with the acquisition of Southern Community Financial Corporation, $0.2 million of non-cash impairment charges related to intangible assets of Naples Capital Advisors and $0.1 million of merger expenses. Excluding these items, core net income, a non-GAAP measure, for the fourth quarter of 2012 was $9.3 million or $0.17 per diluted share as compared to core net income of $8.7 million, or $0.19 per diluted share for the third quarter of 2012. The reconciliation of non-GAAP measures, which the Company believes facilitate the assessment of its banking operations and peer comparability, is included in tabular form at the end of this release.
 
Gene Taylor, Chairman and Chief Executive Officer of Capital Bank, commented, “We are pleased with Capital Bank’s earnings performance for the fourth quarter of 2012, which reflected both an improved credit performance and the acquisition of Southern Community. We also produced a strong increase in loan originations for the fourth quarter compared with the third quarter and significant growth in core deposits.
 
“During the quarter, we successfully completed the integration of Southern Community.  Capital Bank now operates 164 branches on one core processing platform, under centralized management, and with consistent products, rates, and branding across the entire footprint. Looking ahead to 2013, we are continuing to assess selected acquisition targets focusing on those that are additive to our Southeastern franchise without presenting material dilution. Our top priority for 2013 is to improve our core profitability.”
 
Operating and financial highlights for the fourth quarter include the following:

·  
Originated $253.0 million of new loans for the quarter, 70.2% of which were commercial loans, demonstrating continued execution of the Company’s organic growth and portfolio diversification strategies.

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·  
Successfully integrated the Southern Community acquisition onto the Company’s processing platform and permanently rebranded all 22 branches to the Capital Bank brand.

·  
Generated $136 million of organic growth in core deposits (total deposits minus time deposits). At year-end, core deposits represented 64.7% of total deposit funding, and total deposits represented 96.3% of total funding.

·  
Capital Bank Financial Corp. ended the fourth quarter with a tier 1 leverage ratio of 13% and held $125.4 million in cash and cash equivalents.

·  
Completed the fourth quarter with tangible book value per share of $17.74.

CFO Chris Marshall commented, “At quarter end, Capital Bank was strongly capitalized and had significant liquidity with which to fund growth. During 2013, we expect to improve our core return on assets by generating organic loan portfolio growth, implementing cost savings plans, reducing our funding costs, and benefitting from a gradual reduction in credit expenses.”

Financial Discussion

The Company’s banking operations began with the acquisitions of three banks from the FDIC on July 16, 2010 and subsequently included the acquisitions of TIB Financial Corp. on September 30, 2010, Capital Bank Corporation on January 28, 2011, Green Bankshares, Inc. on September 7, 2011 and Southern Community Financial Corporation on October 1, 2012. Accordingly, operating results for the three and twelve months ended December 31, 2012 and 2011 are not generally comparable.

For the acquisition of Southern Community estimated fair values of assets acquired and liabilities assumed are based on the information that is available and the Company believes this information provides a reasonable basis for estimating these fair values. If additional information or evidence is obtained during the measurement period, this may result in changes to the estimated fair value amounts.

Loan Portfolio Growth and Composition

During the fourth quarter, the loan portfolio increased to $4.7 billion from $4.1 billion at September 30, 2012 due to the acquisition of Southern Community, which closed on October 1, 2012.  Excluding the effect of the acquisition of Southern Community, the loan portfolio decreased by $154.3 million, as strong originations of $253.0 million were exceeded by elevated paydowns. These paydowns reflect Capital Bank’s strategy to reduce its legacy concentration in commercial real estate loans.
 
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The relative composition of our loan portfolio at the end of the fourth and third quarters of 2012 and the fourth quarter of 2011 was as follows:
 
   
December 31,
2012
   
September 30,
2012
   
December 31,
2011
 
Commercial real estate
    31 %     32 %     35 %
Commercial
    37 %     36 %     32 %
Consumer
    30 %     30 %     31 %
Other
    2 %     2 %     2 %
Total
    100 %     100 %     100 %

At December 31, 2012, commercial real estate loans had declined to 31% of the total portfolio and commercial loans had increased to 37%, consistent with the Company’s portfolio diversification strategy.

For the fourth quarter of 2012, the loan portfolio yield declined to 6.04% from 6.28% for the third quarter, reflecting the addition of Southern Community’s $772.7 million loan portfolio on October 1, 2012, which had a weighted average yield of 4.99% and lower yields on new loan production.

Deposit Growth, Composition, and Yields

During the fourth quarter, total deposits increased to $5.9 billion from $4.8 billion at September 30, 2012 due to the acquisition of Southern Community. Excluding the impact of the acquisition of Southern Community, deposits decreased by $67.0 million, as $136.0 million of growth in core deposits was offset by planned shrinkage in high-cost legacy time deposits. Core deposits now make up 64.7% of total deposits as compared to 63.1% in the third quarter.

The cost of deposits declined during the quarter to 0.49% from 0.58% for the third quarter due to continued growth in low-cost core deposits, as well as a decline in average yield on time deposits primarily resulting from the Southern Community acquisition.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2012 increased by approximately $5.7 million, or 9.4%, to $66.0 million, from $60.3 million for the third quarter of 2012 and increased $2.4 million, or 3.8%, from the fourth quarter of 2011. The main driver of the increase in net interest income for the quarter was the addition of Southern Community.

Net interest margin for the quarter was 4.11%, a reduction of 34 basis points that was largely driven by the acquisition of Southern Community and the high level of low yielding securities held by that bank at the point of merger. These effects, combined, equated to 23 basis points of the decline. New originations, which were booked at an average yield of 4.27%, normal reinvestment activity and changes in funding cost caused an additional decline of 11 basis points, as compared to the 15 basis point contraction we experienced in the third quarter.

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Non-Interest Income

Non-interest income decreased $5.1 million to $15.3 million for the fourth quarter of 2012 from $20.4 million for the third quarter and decreased $0.7 million from $16.0 million for the fourth quarter of 2011. The decrease in the fourth quarter was driven by a $4.9 million decline in investment securities gains, a quarter over quarter change in FDIC indemnification asset accretion of $0.5 million and the absence of $3.5 million of legal and insurance settlement gains recognized in the third quarter. These declines were offset by a $2.3 million increase in service charges on deposits income, debit card income and fees on mortgage loans sold, coupled with the addition of Southern Community.

Provision for Loan Losses and Credit Quality

The provision for loan losses of $4.4 million recorded for the fourth quarter of 2012 includes approximately a $3.0 million provision for newly originated loans (including the impact of charge-offs of $1.0 million) and an $1.4 million impairment primarily reflecting declines in appraised values and lower expectations for future cash flows from certain residential and construction loans.

The provision for newly originated loans served to increase the allowance to 1.05% of $1.4 billion in originated loans outstanding.

During the fourth quarter, non-performing loans declined from 8.3% to 7.8% of total loans. Acquired impaired loans greater than 90 days past due and still accruing decreased by 7.1% excluding the $49.4 million resulting from the acquisition of Southern Community. Combined, loans greater than 90 days past due and accruing increased by $26.2 million to $352.7 million at the end of the quarter. Nonaccrual loans increased by $2.9 million to $14.0 million during the quarter.

Non-Interest Expense

Non-interest expense decreased to $68.4 million for the fourth quarter of 2012 from $69.6 million for the third quarter and increased from $60.4 for the fourth quarter of 2011. The main driver of the decrease for the quarter was the absence of $2.9 million in losses on extinguishment of debt and $1.8 million of legal settlement expenses as compared to the third quarter along with a decline of $2.6 million in merger, legal, severance and conversion related expense. These reductions were, in part, offset by the addition of Southern Community’s operating expenses.

Financial Position

Total assets increased by $1.1 billion to $7.3 billion as of December 31, 2012 from $6.2 billion as of September 30, 2012 due mainly to the addition of approximately $1.3 billion of assets from Southern Community, net of additional paid in capital.
 
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Cash and cash equivalents increased from $462.2 million to $734.9 million as of December 31, 2012, despite payments to acquire Southern Community and pay off its TARP-related securities and FHLB borrowings. The Company’s investment securities available for sale was $1.0 billion at December 31, 2012.

Total shareholders’ equity increased by $5.9 million during the quarter to $1.2 billion at December 31, 2012. Tangible book value per share was $17.74 as of December 31, 2012.

The Company’s national bank subsidiary, Capital Bank N.A., reported Tier 1, Tier 1 Risk-Based and Total Risk-Based capital ratios of 11.7%, 17.1% and 18.3%, respectively, as of December 31, 2012.

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) 325-2455, and the confirmation pass code is 1007414. Please dial in 10 minutes prior to the beginning of the call. A 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. A telephonic replay of the conference call will be available through February 6, 2013, by dialing (719) 457-0820 and entering pass code 1007414. 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 prospectus 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 statements regarding: (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 the acquired business into our business model; (7) projected population and income growth in our targeted market areas; and (8) 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.

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About Capital Bank Financial Corp.

Capital Bank Financial Corp. is a national 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 N.A., a national banking association with approximately $7.3 billion in total assets as of December 31, 2012 and 164 full-service banking offices throughout Florida, North Carolina, South Carolina, Tennessee and Virginia. To learn more about Capital Bank, N.A., please visit www.capitalbank-us.com.
 
 

 
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CAPITAL BANK FINANCIAL CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
   
For the Quarter Ended
 
   
December 31,
2012
   
September 30,
2012
   
June 30,
2012
   
March 31,
2012
   
December 31,
2011
 
Interest and dividend income
  $ 76,122     $ 69,438     $ 72,893     $ 74,141     $ 74,341  
Interest expense
    10,115       9,104       9,548       10,289       10,761  
NET INTEREST INCOME
    66,007       60,334       63,345       63,852       63,580  
                                         
Provision for loan losses
    4,370       5,771       6,608       5,376       16,790  
                                         
NON-INTEREST INCOME:
                                       
Service charges on deposit accounts
    6,630       5,058       6,332       5,991       6,064  
Debit card income
    2,724       2,442       2,589       2,761       2,847  
Fees on mortgage loans sold
    2,074       1,612       1,205       1,103       942  
Investment advisory and trust fees
    156       85       142       152       196  
FDIC indemnification asset accretion
    317       850       (164 )     322       2,428  
Investment securities gains, net
    9       4,918       933       2,759       1,780  
Other-than-temporary impairment losses on investments:
                                       
Gross impairment loss
    -       -       (38 )     (6 )     -  
    Less: Impairments recognized in other comprehensive income
    -       -       -       -       -  
    Net impairment losses recognized in earnings
    -       -       (38 )     (6 )     -  
                                         
Other income
    3,434       5,482       1,180       1,741       1,755  
Total non-interest income
    15,344       20,447       12,179       14,823       16,012  
                                         
NON-INTEREST EXPENSE:
                                       
Salaries & employee benefits
    28,113       25,202       25,535       30,144       26,237  
Net occupancy expense
    11,031       9,355       9,584       9,290       9,016  
Foreclosed asset related expense
    9,222       9,649       5,150       4,207       4,348  
Conversion and merger related expenses
    604       3,894       1,757       1,288       1,092  
Professional fees
    3,426       2,761       3,025       3,727       3,034  
Loan workout expenses
    1,753       2,308       1,830       1,615       1,211  
Loss on extinguishment of debt
    -       2,946       -       321       -  
Legal settlement expense
    -       1,755       97       900       -  
Impairment of intangible asset
    202       -       -       -       2,872  
Other expense
    14,003       11,680       11,656       11,741       12,616  
Total non-interest expense
    68,354       69,550       58,634       63,233       60,426  
                                         
Income before income taxes
    8,627       5,460       10,282       10,066       2,376  
Income tax (benefit) expense
    3,295       (32,385 )     3,909       3,903       983  
   NET INCOME BEFORE ATTRIBUTION OF NONCONTROLLING INTERESTS
    5,332       37,845       6,373       6,163       1,393  
Net income attributable to non-controlling interests
    -       2,762       862       910       378  
Net income attributable to Capital Bank Financial Corp.
  $ 5,332     $ 35,083     $ 5,511     $ 5,253     $ 1,015  
                                         
 BASIC EARNINGS PER COMMON SHARE:
  $ 0.10     $ 0.76     $ 0.12     $ 0.12     $ 0.02  
 DILUTED EARNINGS PER COMMON SHARE:
  $ 0.10     $ 0.75     $ 0.12     $ 0.12     $ 0.02  
 
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CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands, except per share data)
(Unaudited)
 
   
December 31,
2012
   
September 30,
2012
   
December 31,
2011
 
Assets
                 
Cash and due from banks
  $ 142,361     $ 94,406     $ 87,637  
Interest-bearing deposits with banks
    592,375       367,796       611,137  
Federal funds sold
    138       -       11,189  
                         
Total cash and cash equivalents
    734,874       462,202       709,963  
                         
Trading securities
    -       -       637  
Investment securities held to maturity
    -       -       -  
Investment securities available for sale
    1,006,744       982,309       826,274  
                         
Loans held for sale
    11,276       12,928       20,746  
                         
Loans, net of deferred loan costs and fees
    4,679,290       4,059,284       4,281,717  
Less:  Allowance for loan losses
    54,896       51,587       34,749  
                         
Loans, net
    4,624,394       4,007,697       4,246,968  
                         
Other real estate owned
    154,267       144,621       168,781  
Indemnification asset
    49,417       56,544       66,282  
Receivable from FDIC
    8,486       9,294       13,315  
Premises and equipment, net
    198,457       165,028       159,730  
Goodwill
    147,863       115,960       115,960  
Intangible assets, net
    28,636       23,370       26,692  
Deferred income tax asset
    198,424       170,293       140,047  
Accrued interest receivable and other assets
    132,875       86,932       90,985  
                         
Total Assets
  $ 7,295,713     $ 6,237,178     $ 6,586,380  
                         
Liabilities and Shareholders’ Equity
                       
Liabilities
                       
Deposits:
                       
Noninterest-bearing demand
  $ 895,274     $ 721,785     $ 683,258  
Negotiable order of withdrawal accounts
    1,288,742       1,045,177       1,087,760  
Money market
    1,125,967       867,238       868,375  
Savings
    492,187       424,785       296,355  
Time deposits
    2,071,003       1,788,271       2,189,436  
                         
Total deposits
    5,873,173       4,847,256       5,125,184  
                         
Federal Home Loan Bank advances
    1,460       -       221,018  
Short-term borrowings
    41,508       41,694       54,533  
Long-term borrowings
    180,430       140,766       140,101  
Accrued interest payable and other liabilities
    43,111       57,331       54,634  
                         
Total liabilities
    6,139,682       5,087,047       5,595,470  
                         
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, 33,025, 32,646 and 20,028 shares issued and outstanding, respectively
    330       326       200  
Common stock—Class B $0.01 par value:  200,000 shares authorized, 22,821, 23,198 and 26,122 shares issued and outstanding, respectively
    228       232       261  
Additional paid in capital
    1,076,798       1,073,073       890,627  
Retained earnings
    69,328       63,997       18,150  
Accumulated other comprehensive income
    9,347       12,503       7,167  
Noncontrolling interest
    -       -       74,505  
                         
Total shareholders’ equity
    1,156,031       1,150,131       990,910  
                         
Total Liabilities and Shareholders’ Equity
  $ 7,295,713     $ 6,237,178     $ 6,586,380  

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CAPITAL BANK FINANCIAL CORP.
(In thousands)
(Unaudited)

   
As of
   
As of
   
As of
 
Loans
 
December 31, 2012
   
September 30, 2012
   
December 31, 2011
 
                   
Non-owner occupied commercial real estate
  $ 895,187     $ 818,171     $ 903,914  
Other commercial construction and land
    405,481       332,519       423,932  
Multifamily commercial real estate
    85,020       69,954       98,207  
1-4 family residential construction and land
    82,124       66,460       85,978  
Total commercial real estate
    1,467,812       1,287,104       1,512,031  
                         
Owner occupied commercial real estate
    1,059,469       949,887       902,816  
Commercial and industrial loans
    658,328       518,386       467,047  
Total commercial
    1,717,797       1,468,273       1,369,863  
                         
1-4 family residential
    836,112       737,179       818,547  
Home equity loans
    430,667       351,731       383,768  
Other consumer loans
    137,157       130,935       123,121  
Total consumer
    1,403,936       1,219,845       1,325,436  
                         
Other
    101,021       96,990       95,133  
                         
Total loans
  $ 4,690,566     $ 4,072,212     $ 4,302,463  
                   
Deposits
                 
                   
Noninterest-bearing demand
  $ 895,274     $ 721,785     $ 683,258  
Negotiable order of withdrawal accounts
    1,288,742       1,045,177       1,087,760  
Money market
    1,125,967       867,238       868,375  
Savings
    492,187       424,785       296,355  
Time deposits
    2,071,003       1,788,271       2,189,436  
Total deposits
  $ 5,873,173     $ 4,847,256     $ 5,125,184  

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CAPITAL BANK FINANCIAL CORP.
(Dollars and shares in thousands, except per share data)
(Unaudited)

   
As of or for the Quarter Ended
 
   
December 31,
2012
   
September 30,
2012
   
June 30,
2012
   
March 31,
2012
   
December 31,
2011
 
Net loan charge-offs (recoveries)
  $ 1,060     $ (344 )   $ 1,744     $ (483 )   $ 1,024  
Allowance for loan losses
  $ 54,896     $ 51,587     $ 45,472     $ 40,608     $ 34,749  
Allowance for loan losses/ total loans
    1.17 %     1.27 %     1.08 %     0.96 %     0.81 %
Non-accrual loans
  $ 13,980     $ 11,192     $ 12,544     $ 7,021     $ 5,875  
Acquired impaired loans >90 days past due and still accruing
  $ 352,700     $ 326,453     $ 337,692     $ 348,185     $ 376,633  
Annualized net charge-offs/average loans
    0.09 %     N/A       0.17 %     N/A       0.14 %
                                         
Total interest-earning assets
  $ 6,328,902     $ 5,459,668     $ 5,520,236     $ 5,637,008     $ 5,789,911  
Other real estate owned
  $ 154,267     $ 144,621     $ 158,235     $ 169,433     $ 168,781  
Goodwill and intangibles, net of accumulated amortization
  $ 176,499     $ 139,330     $ 140,367     $ 141,551     $ 142,652  
Tax equivalent net interest margin
    4.11 %     4.45 %     4.60 %     4.50 %     4.33 %
Efficiency ratio
    84.02 %     86.10 %     77.64 %     80.37 %     75.92 %
Average diluted common shares outstanding
    55,401       46,738       45,632       45,478       45,531  
End of quarter common shares outstanding
    55,846       55,844       46,457       46,457       46,150  
Total equity
  $ 1,156,031     $ 1,150,131     $ 1,017,683     $ 1,001,135     $ 990,910  
Book value per common share
  $ 20.70     $ 20.60     $ 20.26     $ 19.93     $ 19.86  
Tangible book value per common share
  $ 17.74     $ 18.26     $ 17.69     $ 17.35     $ 17.25  
Tier 1 capital to average assets - Capital Bank, N.A.
    11.7 %     12.0 %     11.4 %     10.8 %     10.4 %
Tier 1 capital to risk weighted assets – Capital Bank, N.A.
    17.1 %     17.5 %     16.4 %     16.1 %     15.8 %
Total capital to risk weighted assets – Capital Bank, N.A.
    18.3 %     18.8 %     17.6 %     17.2 %     16.7 %
Total assets
  $ 7,295,713     $ 6,237,178     $ 6,303,884     $ 6,453,216     $ 6,586,380  

- MORE -
 
 

 
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)


   
Quarter Ended
December 31, 2012
   
Quarter Ended
September 30, 2012
 
   
Average
Balances
   
Interest*
   
Yield*
   
Average
Balances
   
Interest*
   
Yield*
 
Loans
  $ 4,742,452     $ 72,004       6.04 %   $ 4,120,374     $ 65,031       6.28 %
Investments
    1,074,700       3,470       1.28 %     982,750       4,025       1.63 %
Interest bearing deposits
    562,937       371       0.26 %     280,164       181       0.26 %
Federal Home Loan Bank stock
    41,204       537       5.18 %     39,224       460       4.67 %
Total interest earning assets
    6,421,293       76,382       4.73 %     5,422,512       69,697       5.11 %
Non-interest earning assets
    930,396                       776,340                  
Total assets
  $ 7,351,689                     $ 6,198,852                  
                                                 
Interest bearing liabilities:
                                               
Time
  $ 2,199,407     $ 5,281       0.96 %   $ 1,857,122     $ 5,341       1.14 %
Money market
    1,104,390       913       0.33 %     876,891       758       0.34 %
NOW
    1,246,897       791       0.25 %     1,044,506       636       0.24 %
Savings
    467,009       343       0.29 %     399,300       288       0.29 %
Total interest-bearing deposits
    5,017,703       7,328       0.58 %     4,177,819       7,023       0.67 %
Short-term borrowings and FHLB advances
    45,971       16       0.14 %     80,336       130       0.64 %
Long-term borrowings
    179,282       2,771       6.15 %     135,893       1,951       5.71 %
Total interest bearing liabilities
    5,242,956       10,115       0.77 %     4,394,048       9,104       0.82 %
                                                 
Non-interest bearing deposits
    892,615                       722,987                  
Other liabilities
    63,010                       50,587                  
Shareholders’ equity
    1,153,108                       1,031,230                  
Total liabilities and shareholders’ equity
  $ 7,351,689                     $ 6,198,852                  
                                                 
Net interest income and spread
          $ 66,267       3.97 %           $ 60,593       4.29 %
                                                 
Net interest margin
                    4.11 %                     4.45 %
_______
* Presented on a fully tax equivalent basis
 
- MORE -
 
 

 
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)

   
Quarter Ended
December 31, 2012
   
Quarter Ended
December 31, 2011
 
   
Average
Balances
   
Interest*
   
Yield*
   
Average
Balances
   
Interest*
   
Yield*
 
Loans
  $ 4,742,452     $ 72,004       6.04 %   $ 4,325,052     $ 69,232       6.35 %
Investments
    1,074,700       3,470       1.28 %     777,893       4,615       2.35 %
Interest bearing deposits
    562,937       371       0.26 %     720,512       530       0.29 %
Federal Home Loan Bank stock
    41,204       537       5.18 %     38,797       371       3.79 %
Total interest earning assets
    6,421,293       76,382       4.73 %     5,862,254       74,748       5.06 %
Non-interest earning assets
    930,396                       791,396                  
Total assets
  $ 7,351,689                     $ 6,653,650                  
                                                 
Interest bearing liabilities:
                                               
Time
  $ 2,199,407     $ 5,281       0.96 %   $ 2,289,104     $ 5,692       0.99 %
Money market
    1,104,390       913       0.33 %     858,127       1,328       0.61 %
NOW
    1,246,897       791       0.25 %     1,067,332       932       0.35 %
Savings
    467,009       343       0.29 %     292,496       284       0.39 %
Total interest-bearing deposits
    5,017,703       7,328       0.58 %     4,507,059       8,236       0.72 %
Short-term borrowings and FHLB advances
    45,971       16       0.14 %     299,833       645       0.85 %
Long-term borrowings
    179,282       2,771       6.15 %     134,600       1,879       5.54 %
Total interest bearing liabilities
    5,242,956       10,115       0.77 %     4,941,492       10,760       0.86 %
                                                 
Non-interest bearing deposits
    892,615                       681,608                  
Other liabilities
    63,010                       35,840                  
Shareholders’ equity
    1,153,108                       994,710                  
Total liabilities and shareholders’ equity
  $ 7,351,689                     $ 6,653,650                  
                                                 
Net interest income and spread
          $ 66,267       3.97 %           $ 63,988       4.20 %
                                                 
Net interest margin
                    4.11 %                     4.33 %
_______
* Presented on a fully tax equivalent basis
- MORE -
 
 

 
CAPITAL BANK FINANCIAL CORP.
YEAR TO DATE AVERAGE BALANCES AND YIELDS
(Dollars In thousands)
(Unaudited)

   
Year Ended
December 31, 2012
   
Year Ended
December 31, 2011
 
   
Average
Balances
   
Interest*
   
Yield*
   
Average
Balances
   
Interest*
   
Yield*
 
Loans
  $ 4,332,782     $ 271,993       6.28 %   $ 3,298,499     $ 205,867       6.24 %
Investments
    1,078,025       19,054       1.77 %     777,802       20,346       2.62 %
Interest bearing deposits
    341,242       846       0.25 %     659,220       2,328       0.35 %
Federal Home Loan Bank stock
    39,285       1,830       4.66 %     32,134       758       2.36 %
Total interest earning assets
    5,791,334       293,723       5.07 %     4,767,655       229,299       4.81 %
Non-interest earning assets
    825,014                       593,470                  
Total assets
  $ 6,616,348                     $ 5,361,125                  
                                                 
Interest bearing liabilities:
                                               
Time
  $ 2,039,301     $ 21,423       1.05 %   $ 2,032,034     $ 21,296       1.05 %
Money market
    945,432       3,970       0.42 %     595,910       3,974       0.67 %
NOW
    1,110,878       2,943       0.26 %     614,627       2,509       0.41 %
Savings
    384,104       1,174       0.31 %     203,031       925       0.46 %
Total interest-bearing deposits
    4,479,715       29,510       0.66 %     3,445,602       28,704       0.83 %
Short-term borrowings and FHLB advances
    118,772       953       0.80 %     317,962       2,652       0.83 %
Long-term borrowings
    146,477       8,594       5.87 %     102,288       5,236       5.12 %
Total interest bearing liabilities
    4,744,964       39,057       0.82 %     3,865,852       36,592       0.95 %
                                                 
Non-interest bearing deposits
    772,404                       502,732                  
Other liabilities
    50,421                       34,841                  
Shareholders’ equity
    1,048,559                       957,700                  
Total liabilities and shareholders’ equity
  $ 6,616,348                     $ 5,361,125                  
                                                 
Net interest income and spread
          $ 254,666       4.25 %           $ 192,707       3.86 %
                                                 
Net interest margin
                    4.40 %                     4.04 %
_______
* Presented on a fully tax equivalent basis

- MORE -
 
 

 
RECONCILIATION OF NON-GAAP MEASURES

CORE NET INCOME
(Dollars in millions)

   
Pre Tax
   
Tax effected
   
Pre Tax
   
Tax effected
   
For the
Quarter Ended
   
For the
Quarter Ended
   
For the
Quarter Ended
   
For the
Quarter Ended
 
 
31-Dec-12
   
31-Dec-12
   
30-Sep-12
   
30-Sep-12
 
                         
Net income
  $ 5.3     $ 5.3     $ 37.8     $ 37.8  
                                 
Adjustments
                               
Non-Interest Income
                               
    Security gains*
    -       -       (4.9 )     (3.0 )
    Insurance settlement gain*
    -       -       (1.8 )     (1.1 )
Non-Interest Expense
                               
    Non-cash equity compensation*
    3.8       2.3       4.2       2.6  
    Conversion and severance expense*
    2.4       1.5       3.4       2.0  
    Legal and merger
    0 .1       0 .1       1.5       1.5  
                                 
    Insurance settlement expense*
    -       -       1.8       1.1  
    Loss on extinguishment of debt*
    -       -       2.9       1.8  
    Impairment of intangible*
    0.2       0.1       -       -  
Taxes
                               
    Tax benefit
    -       -       (34.0 )     (34.0 )
Tax effect of adjustments*
    (2.5 )     N/A       (2.2 )     N/A  
Core Net Income
  $ 9.3     $ 9.3     $ 8.7     $ 8.7  

*Tax effected at an income tax rate of 39%

TANGIBLE BOOK VALUE
(Dollars in thousands, except per share data)
 
December 31, 2012
   
September 30, 2012
   
June 30, 2012
   
March 31, 2012
   
December 31, 2011
 
Total shareholders’ equity
  $ 1,156,031     $ 1,150,131     $ 1,017,683     $ 1,001,135     $ 990,910  
Less: Noncontrolling interest
    -       -       (76,610 )     (75,134 )     (74,505 )
Less: CBF proportional share of goodwill, core deposit intangibles, net of taxes**
    (165,354 )     (130,234 )     (119,097 )     (119,753 )     (120,367 )
Tangible book value
  $ 990,677     $ 1,019,897     $ 821,976     $ 806,248     $ 796,038  
   Common shares outstanding
    55,846       55,844       46,457       46,457       46,150  
Tangible book value per share***
  $ 17.74     $ 18.26     $ 17.69     $ 17.35     $ 17.25  
 
 **Proportional share is calculated based upon our ownership percentage of TIB Financial, Capital Bank Corp. and Green Bankshares at each respective period.
***Tangible book value is equal to book value less goodwill and core deposit intangibles, net of related deferred tax liabilities.


 
 
- END -