Exhibit 99.1
![](https://capedge.com/proxy/8-K/0001071992-09-000003/release.jpg)
CONTACT:
B. Grant Yarber
President and Chief Executive Officer
Phone: (919) 645-3494
Email: gyarber@capitalbank-nc.com
FOR IMMEDIATE RELEASE
Capital Bank Corporation Announces 2008 Financial Results
RALEIGH, N.C., January 20, 2009 – Capital Bank Corporation (Nasdaq: CBKN), the parent company of Capital Bank, today reported net income for the year ended December 31, 2008 of $6.3 million compared to $7.9 million for the year ended December 31, 2007. Earnings per share on a fully diluted basis were $0.54 for 2008 compared to $0.68 for 2007.
“The past five quarters, beginning with the fourth quarter of 2007 through today, have been the most challenging for the banking industry since the Great Depression,” stated B. Grant Yarber, president and CEO. “Although Capital Bank has fared much better than many of our peers, we have nevertheless been profoundly affected by the economy and the monetary policy of the Federal Reserve. Throughout 2008, and particularly in the fourth quarter, the significant reduction in the prime lending rate along with the severe liquidity crisis in the marketplace compressed our margin and impacted our profits. At the same time, our clients’ businesses have also suffered. It has been our policy and our practice to proactively work with our clients in good times and bad; therefore, we continued to identify and resolve problem loans throughout the year, which increased our provision expense. Despite these adverse circumstances, the relative strength of Capital Bank has provided the opportunity to grow our franchise by adding the Fayetteville market to our footprint. Further, Capital Bank participated in the U.S. Treasury’s Capital Purchase Plan, which injected an additional $41.3 million dollars of capital into our bank during December 2008. As evidenced by our strong loan growth in 2008, we plan to continue to grow our loans throughout 2009 and 2010, making full use of our strengthened capital position. Specifically, we recently announced that we would increase our mortgage lending practices, continue our flexible treatment of homebuyers that may be in financial distress, and provide low-cost mortgage products for buyers of existing inventories of homes throughout our markets. Capital Bank remains committed to doing our part to keep credit flowing in the markets we serve during this difficult economic environment.”
Partially contributing to lower profitability during 2008 was a decline in net interest income. Net interest income decreased $1.5 million during the year, falling from $44.1 million in 2007 to $42.6 million in 2008, largely due to unprecedented steps taken by the Federal Reserve to revive an ailing national economy. One of the actions taken by the Federal Reserve was to lower the Prime Rate by 400 basis points during 2008. This rapid decline in rates, coupled with competitive pressures in the marketplace for retail deposits, compressed the net interest margin from 3.53% in 2007 to 3.08% in 2008. The margin compression was partially offset by 9.6% growth in average earning assets over the same periods.
Loans grew by $159.3 million during 2008 while deposits increased by $216.6 million. Much of the loan growth occurred in our Triangle and Western N.C. markets, which we believe continue to present quality growth opportunities. On the deposit side, checking and savings accounts increased $32.5 million during the year as the bank continued to emphasize growth in this critical product area. Time deposits increased $200.9 million over the same period. Some of the growth in time deposits was due to a new deposit product offering through CDARS, which provides large-balance customers the opportunity for increased FDIC insurance through the convenience of working with one financial institution. Another reason for growth in time deposits was due to retail customers electing to shift funds from money market savings products to CDs as evidenced by a decline in money market deposits of $16.8 million during 2008. Another contributor to balance sheet growth was the entrance into the Fayetteville market through the purchase of four branches during December 2008, which added $42.3 million and $101.9 million to loans and deposits, respectively.
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Due to continued weakening in the overall economy, asset quality remained a major focus throughout 2008. While our markets remain some of the most resilient in the country, the Company took steps to increase the provision for loan losses in the fourth quarter in response to some softening experienced in the loan portfolio as reflected by certain credit quality ratios. Past due loans as a percent of total loans increased to 1.09% at December 31, 2008 from 0.75% at September 30, 2008 and 0.98% at December 31, 2007. Nonperforming assets, which include loans on nonaccrual and other real estate owned, increased to 0.61% as a percent of total assets at December 31, 2008 compared to 0.47% at September 30, 2008 and 0.50% at December 31, 2007. Allowance for loan losses totaled 1.18% of total loans at December 31, 2008 compared to 1.17% at September 30, 2008 and 1.24% at December 31, 2007. Finally, the allowance for loan losses was 162% of nonperforming loans at December 31, 2008, a decline from 219% at September 30, 2008 and 227% at December 31, 2007.
Provision for loan losses increased $270 thousand for the year ended December 31, 2008 compared to the same period one year ago. The increase in the provision was partially due to loan growth and softening credit quality but was also partially due to enhancements in the methodology for calculating the allowance for loan losses. The enhancements to the allowance methodology were implemented during 2007 based on updated guidance issued through an interagency policy statement by the FDIC, Federal Reserve, and other regulatory agencies. Management continues to thoroughly review its loan portfolio and the adequacy of its allowance for loan losses.
Noninterest income increased $1.5 million, or 16.2%, during 2008 compared to last year despite a $976 thousand decline in mortgage revenue. Service charge income, bank card income and other loan-related fees increased a combined $1.5 million, or 28.4%, compared to last year primarily as a result of management’s continued emphasis on increasing income from these sources. Gains on the sale of certain investment securities and the sale of a branch in Greensboro contributed $249 thousand and $374 thousand, respectively, to the increase in noninterest income.
“Our noninterest income improvement strategies, which were implemented early in the second quarter, continue to show success,” stated Mr. Yarber. “These strategies are based on fee collection efforts, restructured pricing and innovative product enhancements, including our Smart Checking product. Capital Bank remains committed to providing our customers with value added products and services that also allow our shareholders to benefit from a greater diversity of revenue-generating services. Most recently we announced that we will expand our mortgage origination staff to assist customers with either the purchase or refinancing of their primary residence.”
Noninterest expense increased from $39.0 million during 2007 to $41.5 million during 2008. Salaries, furniture and equipment, and data processing costs increased a combined $2.4 million over the same periods. Salaries increased 8.0% from last year due to routine annual compensation adjustments and staffing needs at branches opened in Asheville, Clayton and Zebulon in addition to the four branches purchased in the Fayetteville market. Furniture and equipment expense rose due to equipment and building upgrades as well as higher maintenance costs. Data processing costs increased partially due to system upgrades and enhancements to support growth in the Company’s primary business lines as well as the implementation of an internet-based phone system. Noninterest expense also increased from additional training costs necessary to prepare new associates for the transition at our recently purchased Fayetteville branches as well as additional legal costs from professional advice related to several transactions completed during 2008. In addition, FDIC deposit insurance rose $415 thousand as the regulatory agency continued to increase premiums to cover higher monitoring costs and claims.
Capital Bank Corporation, headquartered in Raleigh, N.C., with approximately $1.7 billion in total assets, offers a broad range of financial services. Capital Bank operates 32 banking offices in Asheville (4), Burlington (4), Cary, Clayton, Fayetteville (3), Graham (2), Hickory, Mebane, Morrisville, Oxford, Parkton, Pittsboro, Raleigh (5), Sanford (3), Siler City, Wake Forest and Zebulon. The Company’s website is http://www.capitalbank-nc.com.
Information in this press release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates, and the effects of competition. 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
Summary of Operations
(Unaudited) | Three Months Ended December 31, | Year Ended December 31, | |||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
(In thousands except per share data) | |||||||||||||
Interest income | $ | 20,088 | $ | 23,840 | $ | 85,020 | $ | 94,537 | |||||
Interest expense | 10,156 | 12,875 | 42,424 | 50,423 | |||||||||
Net interest income | 9,932 | 10,965 | 42,596 | 44,114 | |||||||||
Provision for loan losses | 1,701 | 3,099 | 3,876 | 3,606 | |||||||||
Net interest income after provision for loan losses | 8,231 | 7,866 | 38,720 | 40,508 | |||||||||
Noninterest income | 2,297 | 2,455 | 11,051 | 9,511 | |||||||||
Noninterest expense | 11,095 | 10,401 | 41,471 | 39,037 | |||||||||
Income (loss) before taxes | (567 | ) | (80 | ) | 8,300 | 10,982 | |||||||
Income tax expense (benefit) | (500 | ) | (125 | ) | 1,973 | 3,124 | |||||||
Net income (loss) | $ | (67 | ) | $ | 45 | $ | 6,327 | $ | 7,858 | ||||
Earnings (loss) per common share – basic | $ | (0.02 | ) | $ | – | $ | 0.55 | $ | 0.69 | ||||
Earnings (loss) per common share – fully diluted | $ | (0.02 | ) | $ | – | $ | 0.54 | $ | 0.68 | ||||
Weighted average shares outstanding: | |||||||||||||
Basic | 11,309 | 11,252 | 11,303 | 11,424 | |||||||||
Fully diluted | 11,325 | 11,316 | 11,426 | 11,493 |
End of Period Balances
(Unaudited) | 2008 | 2007 | ||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31(a) | ||||||||||||
(Dollars in thousands except per share data) | ||||||||||||||||
Total assets | $ | 1,716,198 | $ | 1,594,402 | $ | 1,592,034 | $ | 1,575,301 | $ | 1,517,603 | ||||||
Investment securities | 278,138 | 244,310 | 246,468 | 258,086 | 259,116 | |||||||||||
Loans (gross)* | 1,254,368 | 1,194,149 | 1,178,157 | 1,150,497 | 1,095,107 | |||||||||||
Allowance for loan losses | 14,795 | 14,017 | 13,910 | 13,563 | 13,571 | |||||||||||
Total earning assets | 1,533,354 | 1,444,727 | 1,435,020 | 1,419,174 | 1,362,048 | |||||||||||
Deposits | 1,315,314 | 1,197,721 | 1,182,615 | 1,150,897 | 1,098,698 | |||||||||||
Shareholders’ equity | 210,525 | 166,521 | 165,731 | 167,967 | 164,300 | |||||||||||
Book value per common share | $ | 15.06 | $ | 14.83 | $ | 14.76 | $ | 14.95 | $ | 14.71 | ||||||
Tangible book value per common share | $ | 8.92 | $ | 9.26 | $ | 9.16 | $ | 9.33 | $ | 9.04 | ||||||
(a) Derived from audited consolidated financial statements
*Includes loans held for sale
Average Quarterly Balances
(Unaudited) | 2008 | 2007 | ||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Total assets | $ | 1,620,817 | $ | 1,574,810 | $ | 1,578,357 | $ | 1,555,986 | $ | 1,492,563 | ||||||
Investment securities | 246,658 | 245,408 | 256,406 | 256,538 | 242,272 | |||||||||||
Loans (gross)* | 1,213,027 | 1,176,491 | 1,166,795 | 1,142,728 | 1,090,801 | |||||||||||
Total earning assets | 1,473,422 | 1,425,516 | 1,429,301 | 1,407,345 | 1,347,727 | |||||||||||
Deposits | 1,238,343 | 1,164,362 | 1,148,671 | 1,139,106 | 1,066,438 | |||||||||||
Shareholders’ equity | 171,227 | 166,570 | 170,945 | 167,610 | 166,222 | |||||||||||
*Includes loans held for sale
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CAPITAL BANK CORPORATION
Quarterly Results
(Unaudited) | 2008 | 2007 | ||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
(In thousands except per share data) | ||||||||||||||||
Net interest income | $ | 9,932 | $ | 10,827 | $ | 10,928 | $ | 10,909 | $ | 10,965 | ||||||
Provision for loan losses | 1,701 | 760 | 850 | 565 | 3,099 | |||||||||||
Net interest income after provision for loan losses | 8,231 | 10,067 | 10,078 | 10,344 | 7,866 | |||||||||||
Noninterest income | 2,297 | 3,267 | 2,974 | 2,227 | 2,455 | |||||||||||
Noninterest expense | 11,095 | 10,517 | 9,968 | 9,605 | 10,401 | |||||||||||
Income (loss) before taxes | (567 | ) | 2,817 | 3,084 | 2,966 | (80 | ) | |||||||||
Income tax expense (benefit) | (500 | ) | 805 | 869 | 799 | (125 | ) | |||||||||
Net income (loss) | $ | (67 | ) | $ | 2,012 | $ | 2,215 | $ | 2,167 | $ | 45 | |||||
Earnings (loss) per common share – basic | $ | (0.02 | ) | $ | 0.18 | $ | 0.20 | $ | 0.19 | $ | – | |||||
Earnings (loss) per common share – fully diluted | $ | (0.02 | ) | $ | 0.18 | $ | 0.20 | $ | 0.19 | $ | – | |||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 11,309 | 11,302 | 11,310 | 11,289 | 11,252 | |||||||||||
Fully diluted | 11,325 | 11,313 | 11,324 | 11,306 | 11,316 | |||||||||||
Quarterly Net Interest Margin*
(Unaudited) | 2008 | 2007 | ||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
Yield on earning assets | 5.51 | % | 5.94 | % | 6.09 | % | 6.60 | % | 7.17 | % | ||||||
Cost of interest bearing liabilities | 3.05 | 3.12 | 3.24 | 3.76 | 4.34 | |||||||||||
Net interest spread | 2.46 | 2.82 | 2.85 | 2.83 | 2.83 | |||||||||||
Net interest margin | 2.78 | 3.13 | 3.18 | 3.23 | 3.38 | |||||||||||
*Annualized and on a fully taxable equivalent basis
Nonperforming Assets
(Unaudited) | 2008 | 2007 | ||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31(a) | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial | $ | 4,682 | $ | 4,343 | $ | 3,650 | $ | 2,919 | $ | 4,489 | ||||||
Construction | 3,843 | 1,570 | 418 | 230 | 562 | |||||||||||
Consumer | 92 | 25 | 42 | 61 | 28 | |||||||||||
Home equity | 275 | 275 | 515 | 579 | 397 | |||||||||||
Residential mortgage | 223 | 198 | 582 | 463 | 506 | |||||||||||
Total nonperforming loans | 9,115 | 6,411 | 5,207 | 4,252 | 5,982 | |||||||||||
Other real estate owned | 1,347 | 1,019 | 663 | 890 | 1,571 | |||||||||||
Total nonperforming assets | $ | 10,462 | $ | 7,430 | $ | 5,870 | $ | 5,142 | $ | 7,553 | ||||||
Nonperforming assets include loans that are 90 days or more past due or in nonaccrual status and other real estate owned.
(a) Derived from audited consolidated financial statements
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Key Ratios
(Unaudited) | 2008 | 2007 | ||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Past due loans | $ | 13,642 | $ | 8,933 | $ | 9,239 | $ | 9,380 | $ | 10,769 | ||||||
Past due loans as a percent of total loans | 1.09 | % | 0.75 | % | 0.78 | % | 0.82 | % | 0.98 | % | ||||||
Net charge-offs | $ | 1,768 | $ | 653 | $ | 503 | $ | 573 | $ | 2,894 | ||||||
Net charge-offs as a percent of average loans (annualized) | 0.58 | % | 0.22 | % | 0.17 | % | 0.20 | % | 1.06 | % | ||||||
Allowance for loan losses as a percent of total loans | 1.18 | % | 1.17 | % | 1.18 | % | 1.18 | % | 1.24 | % | ||||||
Nonperforming assets as a percent of total assets | 0.61 | % | 0.47 | % | 0.37 | % | 0.33 | % | 0.50 | % | ||||||
Allowance for loan losses as a percent of nonperforming loans | 162 | % | 219 | % | 267 | % | 319 | % | 227 | % |
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2008 and 2007
December 31, 2008 | December 31, 2007 | ||||||
(Dollars in thousands except share data) | (Unaudited) | ||||||
Assets | |||||||
Cash and due from banks: | |||||||
Interest earning | $ | 719 | $ | 7,815 | |||
Noninterest earning | 53,607 | 32,347 | |||||
Federal funds sold and short term investments | 129 | 10 | |||||
Total cash and cash equivalents | 54,455 | 40,172 | |||||
Investment securities – available for sale, at fair value | 272,944 | 249,094 | |||||
Investment securities – held to maturity, at amortized cost | 5,194 | 10,022 | |||||
Loans – net of unearned income and deferred fees | 1,254,368 | 1,095,107 | |||||
Allowance for loan losses | (14,795 | ) | (13,571 | ) | |||
Net loans | 1,239,573 | 1,081,536 | |||||
Premises and equipment, net | 24,640 | 23,863 | |||||
Bank-owned life insurance | 22,368 | 21,589 | |||||
Goodwill and deposit premium, net | 69,002 | 63,345 | |||||
Deferred income tax | 6,163 | 5,829 | |||||
Accrued interest receivable | 6,225 | 7,789 | |||||
Other assets | 15,634 | 14,364 | |||||
Total assets | $ | 1,716,198 | $ | 1,517,603 | |||
Liabilities | |||||||
Deposits: | |||||||
Demand, noninterest bearing | $ | 125,281 | $ | 114,780 | |||
Savings and interest bearing checking | 173,711 | 151,698 | |||||
Money market deposit accounts | 212,780 | 229,560 | |||||
Time deposits less than $100,000 | 509,231 | 370,416 | |||||
Time deposits $100,000 and greater | 294,311 | 232,244 | |||||
Total deposits | 1,315,314 | 1,098,698 | |||||
Repurchase agreements and federal funds purchased | 15,010 | 45,295 | |||||
Borrowings | 132,000 | 163,347 | |||||
Subordinated debentures | 30,930 | 30,930 | |||||
Other liabilities | 12,419 | 15,033 | |||||
Total liabilities | 1,505,673 | 1,353,303 | |||||
Commitments and contingencies | |||||||
Shareholders’ Equity | |||||||
Preferred stock, $1,000 par value; 100,000 and 0 shares authorized; 41,279 and 0 issued and outstanding as of December 31, 2008 and 2007, respectively (liquidation preference of $41,279,000 as of December 31, 2008) | 39,839 | – | |||||
Common stock, no par value; 20,000,000 shares authorized; 11,238,085 and 11,169,777 shares issued and outstanding as of December 31, 2008 and 2007, respectively | 139,209 | 136,154 | |||||
Retained earnings | 30,591 | 27,985 | |||||
Accumulated other comprehensive income | 886 | 161 | |||||
Total shareholders’ equity | 210,525 | 164,300 | |||||
Total liabilities and shareholders’ equity | $ | 1,716,198 | $ | 1,517,603 |
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Twelve Month Periods Ended December 31, 2008 and 2007 (Unaudited)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
(Dollars in thousands except per share data) | |||||||||||||
Interest income: | |||||||||||||
Loans and loan fees | $ | 17,009 | $ | 20,835 | $ | 72,494 | $ | 82,066 | |||||
Investment securities: | |||||||||||||
Taxable interest income | 2,319 | 1,889 | 8,935 | 7,731 | |||||||||
Tax-exempt interest income | 734 | 825 | 3,169 | 3,237 | |||||||||
Dividends | 1 | 122 | 294 | 451 | |||||||||
Federal funds and other interest income | 25 | 169 | 128 | 1,052 | |||||||||
Total interest income | 20,088 | 23,840 | 85,020 | 94,537 | |||||||||
Interest expense: | |||||||||||||
Deposits | 8,107 | 9,929 | 33,042 | 39,700 | |||||||||
Borrowings and repurchase agreements | 2,049 | 2,946 | 9,382 | 10,723 | |||||||||
Total interest expense | 10,156 | 12,875 | 42,424 | 50,423 | |||||||||
Net interest income | 9,932 | 10,965 | 42,596 | 44,114 | |||||||||
Provision for loan losses | 1,701 | 3,099 | 3,876 | 3,606 | |||||||||
Net interest income after provision for loan losses | 8,231 | 7,866 | 38,720 | 40,508 | |||||||||
Noninterest income: | |||||||||||||
Service charges and other fees | 1,054 | 1,011 | 4,459 | 3,780 | |||||||||
Mortgage fees and revenues | 237 | 336 | 1,005 | 1,981 | |||||||||
Other loan fees | 251 | 124 | 1,143 | 555 | |||||||||
Brokerage fees | 162 | 192 | 732 | 601 | |||||||||
Bank card services | 322 | 309 | 1,332 | 1,064 | |||||||||
Bank-owned life insurance | 135 | 218 | 952 | 841 | |||||||||
Net gain (loss) on sale of investment securities | – | (49 | ) | 249 | (49 | ) | |||||||
Gain on sale of branch | (52 | ) | – | 374 | – | ||||||||
Other | 188 | 314 | 805 | 738 | |||||||||
Total noninterest income | 2,297 | 2,455 | 11,051 | 9,511 | |||||||||
Noninterest expense: | |||||||||||||
Salaries and employee benefits | 5,771 | 4,553 | 21,255 | 19,674 | |||||||||
Occupancy | 1,161 | 1,844 | 4,458 | 4,897 | |||||||||
Furniture and equipment | 817 | 933 | 3,135 | 2,859 | |||||||||
Data processing and telecommunications | 610 | 436 | 2,135 | 1,637 | |||||||||
Advertising | 515 | 450 | 1,515 | 1,442 | |||||||||
Office expenses | 339 | 325 | 1,317 | 1,389 | |||||||||
Professional fees | 466 | 420 | 1,479 | 1,289 | |||||||||
Business development and travel | 360 | 308 | 1,393 | 1,217 | |||||||||
Amortization of deposit premiums | 267 | 298 | 1,037 | 1,198 | |||||||||
Miscellaneous loan handling costs | 278 | 198 | 848 | 743 | |||||||||
Directors fees | 38 | (145 | ) | 740 | 424 | ||||||||
Insurance | (61 | ) | 172 | 275 | 435 | ||||||||
FDIC deposit insurance | 243 | 71 | 685 | 270 | |||||||||
Other | 291 | 538 | 1,199 | 1,563 | |||||||||
Total noninterest expense | 11,095 | 10,401 | 41,471 | 39,037 | |||||||||
Net income (loss) before tax expense (benefit) | (567 | ) | (80 | ) | 8,300 | 10,982 | |||||||
Income tax expense (benefit) | (500 | ) | (125 | ) | 1,973 | 3,124 | |||||||
Net income (loss) | $ | (67 | ) | $ | 45 | $ | 6,327 | $ | 7,858 | ||||
Net income (loss) applicable to preferred shareholder | 124 | – | 124 | – | |||||||||
Net income (loss) applicable to common shareholders | $ | (191 | ) | $ | 45 | $ | 6,203 | $ | 7,858 | ||||
Earnings (loss) per common share – basic | $ | (0.02 | ) | $ | – | $ | 0.55 | $ | 0.69 | ||||
Earnings (loss) per common share – diluted | $ | (0.02 | ) | $ | – | $ | 0.54 | $ | 0.68 |
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CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
For the Three Months Ended December 31, 2008, September 30, 2008 and December 31, 2007 (Unaudited)
Tax Equivalent Basis (1)
December 31, 2008 | September 30, 2008 | December 31, 2007 | ||||||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Amount Earned | Average Rate | Average Balance | Amount Earned | Average Rate | Average Balance | Amount Earned | Average Rate | |||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Loans receivable: (2) | ||||||||||||||||||||||||||||
Commercial | $ | 1,052,172 | $ | 14,719 | 5.55 | % | $ | 1,018,947 | $ | 15,469 | 6.02 | % | $ | 933,847 | $ | 17,821 | 7.57 | % | ||||||||||
Consumer | 47,537 | 888 | 7.41 | 46,480 | 875 | 7.47 | 43,042 | 895 | 8.25 | |||||||||||||||||||
Home equity | 89,125 | 1,047 | 4.66 | 84,441 | 1,133 | 5.32 | 78,221 | 1,547 | 7.85 | |||||||||||||||||||
Residential mortgages | 24,193 | 355 | 5.87 | 26,623 | 398 | 5.98 | 35,691 | 572 | 6.36 | |||||||||||||||||||
Total loans | 1,213,027 | 17,009 | 5.56 | 1,176,491 | 17,875 | 6.03 | 1,090,801 | 20,835 | 7.58 | |||||||||||||||||||
Investment securities (3) | 246,658 | 3,430 | 5.56 | 245,408 | 3,452 | 5.63 | 242,272 | 3,347 | 5.48 | |||||||||||||||||||
Federal funds sold and other interest on short-term investments | 13,737 | 25 | 0.72 | 3,617 | 15 | 1.65 | 14,654 | 169 | 4.58 | |||||||||||||||||||
Total interest-earning assets | 1,473,422 | $ | 20,464 | 5.51 | % | 1,425,516 | $ | 21,342 | 5.94 | % | 1,347,727 | $ | 24,351 | 7.17 | % | |||||||||||||
Cash and due from banks | 25,018 | 25,554 | 27,617 | |||||||||||||||||||||||||
Other assets | 136,387 | 137,792 | 130,340 | |||||||||||||||||||||||||
Allowance for loan losses | (14,010 | ) | (14,052 | ) | (13,121 | ) | ||||||||||||||||||||||
Total assets | $ | 1,620,817 | $ | 1,574,810 | $ | 1,492,563 | ||||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||||
Savings deposits | $ | 27,948 | $ | 11 | 0.16 | % | $ | 30,169 | $ | 30 | 0.39 | % | $ | 32,800 | $ | 56 | 0.68 | % | ||||||||||
Interest-bearing demand deposits | 336,011 | 1,363 | 1.61 | 342,575 | 1,802 | 2.09 | 350,580 | 2,749 | 3.11 | |||||||||||||||||||
Time deposits | 758,491 | 6,733 | 3.52 | 679,162 | 6,005 | 3.51 | 568,604 | 7,124 | 4.97 | |||||||||||||||||||
Total interest-bearing deposits | 1,122,450 | 8,107 | 2.87 | 1,051,906 | 7,837 | 2.96 | 951,984 | 9,929 | 4.14 | |||||||||||||||||||
Borrowed funds | 145,962 | 1,605 | 4.36 | 174,735 | 1,786 | 4.06 | 156,853 | 2,010 | 5.08 | |||||||||||||||||||
Subordinated debt | 30,930 | 424 | 5.44 | 30,930 | 407 | 5.22 | 30,930 | 597 | 7.66 | |||||||||||||||||||
Repurchase agreements and fed funds purchased | 22,050 | 20 | 0.34 | 27,039 | 74 | 1.09 | 38,499 | 339 | 3.49 | |||||||||||||||||||
Total interest-bearing liabilities | 1,321,392 | $ | 10,156 | 3.05 | % | 1,284,610 | $ | 10,104 | 3.12 | % | 1,178,266 | $ | 12,875 | 4.34 | % | |||||||||||||
Noninterest-bearing deposits | 115,893 | 112,456 | 114,454 | |||||||||||||||||||||||||
Other liabilities | 12,305 | 11,174 | 33,621 | |||||||||||||||||||||||||
Total liabilities | 1,449,590 | 1,408,240 | 1,326,341 | |||||||||||||||||||||||||
Shareholders’ equity | 171,227 | 166,570 | 166,222 | |||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,620,817 | $ | 1,574,810 | $ | 1,492,563 | ||||||||||||||||||||||
Net interest spread (4) | 2.46 | % | 2.82 | % | 2.83 | % | ||||||||||||||||||||||
Tax equivalent adjustment | $ | 376 | $ | 411 | $ | 511 | ||||||||||||||||||||||
Net interest income and net interest margin (5) | $ | 10,308 | 2.78 | % | $ | 11,238 | 3.13 | % | $ | 11,476 | 3.38 | % |
(1) | The tax equivalent basis is computed using a blended federal and state tax rate of approximately 34%. |
(2) | Loans receivable include 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. |
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CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
For the Years Ended December 31, 2008 and 2007 (Unaudited)
Tax Equivalent Basis (1)
December 31, 2008 | December 31, 2007 | ||||||||||||||||||
(Dollars in thousands) | Average Balance | Amount Earned | Average Rate | Average Balance | Amount Earned | Average Rate | |||||||||||||
Assets | |||||||||||||||||||
Loans receivable: (2) | |||||||||||||||||||
Commercial | $ | 1,017,157 | $ | 62,678 | 6.15 | % | $ | 877,876 | $ | 69,203 | 7.88 | % | |||||||
Consumer | 46,767 | 3,542 | 7.55 | 40,579 | 3,459 | 8.52 | |||||||||||||
Home equity | 83,511 | 4,602 | 5.50 | 80,177 | 6,682 | 8.33 | |||||||||||||
Residential mortgages | 27,435 | 1,672 | 6.09 | 43,227 | 2,722 | 6.30 | |||||||||||||
Total Loans | 1,174,870 | 72,494 | 6.15 | 1,041,859 | 82,066 | 7.88 | |||||||||||||
Investment securities (3) | 251,224 | 14,026 | 5.58 | 246,736 | 13,476 | 5.46 | |||||||||||||
Federal funds sold and other interest on short-term investments | 7,888 | 128 | 1.62 | 20,417 | 1,052 | 5.15 | |||||||||||||
Total interest-earnings assets | 1,433,981 | $ | 86,648 | 6.03 | % | 1,309,012 | $ | 96,594 | 7.38 | % | |||||||||
Cash and due from banks | 25,882 | 27,740 | |||||||||||||||||
Other assets | 136,559 | 129,629 | |||||||||||||||||
Allowance for loan losses | (13,846 | ) | (13,307 | ) | |||||||||||||||
Total assets | $ | 1,582,576 | $ | 1,453,074 | |||||||||||||||
Liabilities and Equity | |||||||||||||||||||
Savings deposits | $ | 29,756 | $ | 122 | 0.41 | % | $ | 33,559 | $ | 194 | 0.58 | % | |||||||
Interest-bearing demand deposits | 336,899 | 6,655 | 1.97 | 359,373 | 12,165 | 3.38 | |||||||||||||
Time deposits | 691,140 | 26,265 | 3.79 | 568,604 | 27,341 | 4.81 | |||||||||||||
Total interest-bearing deposits | 1,057,795 | 33,042 | 3.12 | 961,536 | 39,700 | 4.13 | |||||||||||||
Borrowed funds | 168,501 | 7,234 | 4.28 | 134,590 | 6,920 | 5.14 | |||||||||||||
Subordinated debt | 30,930 | 1,761 | 5.68 | 30,930 | 2,387 | 7.72 | |||||||||||||
Repurchase agreements and fed funds purchased | 29,929 | 387 | 1.29 | 34,689 | 1,416 | 4.08 | |||||||||||||
Total interest-bearing liabilities | 1,287,156 | $ | 42,424 | 3.29 | % | 1,161,745 | $ | 50,423 | 4.34 | % | |||||||||
Noninterest-bearing deposits | 114,982 | 111,829 | |||||||||||||||||
Other liabilities | 11,352 | 14,940 | |||||||||||||||||
Total liabilities | 1,413,489 | 1,288,514 | |||||||||||||||||
Shareholders’ equity | 169,087 | 164,560 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,582,576 | $ | 1,453,074 | |||||||||||||||
Net interest spread (4) | 2.74 | % | 3.04 | % | |||||||||||||||
Tax equivalent adjustment | $ | 1,628 | $ | 2,057 | |||||||||||||||
Net interest income and net interest margin (5) | $ | 44,224 | 3.08 | % | $ | 46,171 | 3.53 | % |
(1) | The tax equivalent basis is computed using a blended federal and state tax rate of approximately 34%. |
(2) | Loans receivable include 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. |
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