EXHIBIT 99.1
CONTACT:
Kenneth A. Posner
Chief of Investment Analytics and Investor Relations Executive
Phone: (212) 399-4020
E-mail: Kposner@cbfcorp.com
CAPITAL BANK FINANCIAL CORP. REPORTS SEQUENTIAL INCREASE OF 101% IN SECOND-QUARTER NET INCOME TO $0.21 PER DILUTED SHARE AND 28% IN CORE NET INCOME TO $0.22 PER DILUTED SHARE
| · | Net income and core net income increased 101% and 28% to $11.1 million, or $0.21 per diluted share, and $12.1 million, or $0.22 per diluted share, respectively, over the first quarter; |
| · | Loan originations increased to a record high of $301.6 million for the quarter, a 20% increase over the first-quarter and the prior-year second quarter; |
| · | Total cost of deposits declined during the quarter by three basis points to 0.43% and core deposit costs declined to 0.14%; |
| · | Net interest margin increased by six basis points to 4.47%; |
| · | Resolved $132.3 million in problem assets on strong loan collections and REO sales; |
| · | Ended the second quarter with a Tier 1 leverage ratio of 13.3%. |
Coral Gables, Fla. (July 24, 2013) - Capital Bank Financial Corp. (Nasdaq: CBF) today reported second quarter 2013 net income of $11.1 million, or $0.21 per diluted share, an increase of 101% compared to net income of $5.6 million, or $0.10 per diluted share, for the first quarter of 2013. Core net income for the second quarter of 2013 increased 28% to $12.1 million, or $0.22 per diluted share, compared to core net income of $9.4 million, or $0.17 per diluted share for the first quarter of 2013. Core adjustments for the second quarter of 2013 included $1.3 million of non-cash equity compensation associated with original founder awards, $0.2 million of contingent value right (“CVR”) expense, a $0.2 million gain on investment securities, and $0.1 million of merger related costs. The reconciliation of non-GAAP measures (including core net income, tangible book value and tangible book value per share), 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, “As we pass the third anniversary of the start of our banking operations, we are pleased to see growing originations, lower deposit costs, and improved profitability with core return on average assets of 0.69%.”
Chris Marshall, Chief Financial Officer of Capital Bank, added, “The Company’s balance sheet remains asset sensitive. We are well-positioned for higher interest rates in the future should they continue to rise. In the short term, the Company’s top priority remains generating revenue and income growth and we are confident in our ability to do that.”
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July 24, 2013
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 six months ended June 30, 2013 and 2012 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 second quarter, the loan portfolio decreased by $45.3 million, or 1%, to $4.6 billion as originations of $301.6 million were offset by $103.8 million of resolutions of problem loans and $243.1 million of principal repayments. Adversely classified loans decreased by $110.8 million, which contributed to $65.5 million in growth of the Company’s $3.9 billion of non-adversely classified loans.
The relative composition of the Company’s loan portfolio at the end of the second and first quarter of 2013 and the fourth quarter of 2012 was as follows:
June 30, 2013 | March 31, 2013 | December 31, 2012 | ||||||||||
| Commercial real estate | 29 | % | 31 | % | 31 | % | ||||||
| Commercial | 39 | % | 37 | % | 37 | % | ||||||
| Consumer | 30 | % | 30 | % | 30 | % | ||||||
| Other | 2 | % | 2 | % | 2 | % | ||||||
| Total | 100 | % | 100 | % | 100 | % | ||||||
Strong originations of commercial loans during the second quarter increased the Company’s portfolio mix of commercial loans while reducing the concentration in commercial real estate loans that characterized its legacy acquired portfolios.
For the second quarter of 2013, the loan portfolio yield decreased to 6.17% from 6.37% for the first quarter of 2013, reflecting the increased production mix favoring Capital Bank’s target variable rate commercial and industrial loans to high quality relationship customers, which currently bear lower yields than the Company’s other loan products. This decrease was partially offset by increased yields of acquired impaired loans as a result of incremental improvement in the most recent estimates of cash flows for certain loan pools, substantially related to the Company’s legacy Southern Community portfolio, with smaller positive and negative adjustments in other legacy portfolios. Accordingly, the average yield for acquired impaired loans increased to 7.56% as of the end of the second quarter from 7.13% at the end of the first quarter.
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July 24, 2013
Deposit Growth, Composition, and Yields
During the second quarter, total deposits decreased to $5.5 billion from $5.7 billion at March 31, 2013. The $228.2 million decrease was primarily a result of continued planned shrinkage in high-cost legacy time deposits. Core deposits now make up 67.5% of total deposits as compared to 66.3% in the first quarter of 2013.
The cost of deposits declined during the quarter to 0.43% from 0.46% for the first quarter of 2013 due to an increase in the average balance of noninterest bearing and savings accounts during the second quarter, as well as a decline in average balances and rates on all deposit types, led by a four basis point decline in time deposit rates. The costs of core deposits declined to 0.14% from 0.15%. As these costs include the impact of fair value adjustments for deposits assumed in acquisitions, the actual contractual cost of deposits improved by five basis points during the quarter to 0.56% from 0.61% the prior quarter.
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2013 decreased by approximately $0.7 million, or 1%, to $67.2 million from $67.8 million for the first quarter of 2013 and increased $3.8 million, or 6%, from the second quarter of 2012. The main driver of the decrease in net interest income for the quarter was the decrease in loan portfolio yields, partially offset by additional accretion from legacy loan portfolios, the late first-quarter reduction of long-term debt and a decline in rates paid across all deposit types. The increase in net interest income over the prior year second-quarter was primarily due to increased loan balances attributable to the acquisition of Southern Community and a decline in cost of all deposit types coupled with the payoff of federal home loan bank advances during the second half of the prior year.
The net interest margin for the second quarter was 4.47%, an increase of six basis points, which was also largely driven by additional accretion from legacy loan portfolios, the decline in rates paid across all deposit types, redeployment of excess cash into securities, and the reduction in high coupon trust preferred debt pre-paid in the first quarter. New originations, which were booked at an average yield of 3.98%, partially offset funding cost savings and the increased loan yields on legacy portfolios.
Non-Interest Income
Non-interest income increased $2.6 million to $13.5 million for the second quarter of 2013 from $10.9 million for the first quarter of 2013 and increased $1.3 million from $12.2 million for the second quarter of 2012. The increase in the quarter was mainly driven by a quarter over quarter decrease in FDIC indemnification asset amortization of $1.1 million. The higher first quarter amortization resulted from lower credit loss expectations, which remained consistent with the Company’s most recent estimates for covered loans. Additionally, mortgage fees increased $0.4 million from the first quarter due to increased volumes and profitability of sold mortgage loans, and the Company recorded gains of $0.6 million and $0.2 million on sales of facilities and investment securities, respectively. The increase in non-interest income over the prior year second-quarter was mainly due to increased mortgage fees and gains on sales of facilities, partially offset by higher FDIC indemnification asset amortization.
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Provision for Loan Losses and Credit Quality
The provision for loan losses of $3.9 million recorded for the second quarter of 2013 includes a $2.0 million provision for originated loans and $1.9 million in impairment due to reduced cash flow expectations on certain acquired impaired loan pools.
Net charge offs of $4.8 million for the second quarter of 2013 includes a $3.7 million charge-off of a single commercial credit that was specifically reserved for during the prior quarter.
The provision for originated loans served to increase the allowance to $16.8 million, or 0.92% of $1.8 billion in originated loans outstanding.
During the second quarter, non-performing loans decreased by $54.0 million to $305.7 million, or 6.7% of total loans, from $359.6 million, or 7.8% of total loans at the end of the first quarter of 2013. Acquired impaired loans greater than 90 days past due and still accruing, decreased by $46.7 million or 13.6% to $294.6 million at the end of the quarter. Nonaccrual loans decreased to 0.48% of total non-purchased credit impaired loans from 0.87% at the end of the first quarter. The decrease in nonaccrual loans was primarily due to the $3.7 million charge-off of a single commercial credit discussed above.
Non-Interest Expense
Non-interest expense decreased to $59.1 million for the second quarter of 2013 from $61.0 million for the first quarter of 2013 and increased from $58.6 million for the second quarter of 2012. The main driver of the decrease for the quarter was the decline in CVR expense and overall reduction in operational related expenses, partially offset by an increase in salaries and employee benefits. The higher level of CVR expense during the previous quarter was attributable to first- quarter cash flow estimates of lower credit loss expectations in the Green Bankshares portfolio, which remained largely consistent through the second quarter. The increase in non-interest expense over the prior year second-quarter was mainly due to increased operational expenses attributable to the acquisition of Southern Community partially offset by a reduction in non-cash equity compensation.
Income Tax Expense
Income tax expense was $6.5 million for the second quarter of 2013, an effective income tax rate of 36.9%. The significant decline in effective rate from 48.5% in the first quarter was due to the first quarter expense associated with the valuation adjustment for the CVR issued in connection with the acquisition of Green Bankshares in 2011, since any payout would not be a deductible expense for income tax purposes.
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July 24, 2013
Financial Position
Total assets decreased by $0.3 billion to $6.8 billion as of June 30, 2013 from $7.1 billion as of March 31, 2013, due mainly to a $0.2 billion reduction in deposits and its associated effect on cash.
Cash and cash equivalents decreased to $156.5 million at the end of the second quarter from $510.5 million as of March 31, 2013, due mainly to the reduction in deposits and completion of the $50.0 million stock repurchase program authorized during the first quarter. The Company’s investment securities increased by $126.8 million as excess liquidity was invested in high quality securities increasing the available for sale portfolio to $1.3 billion at June 30, 2013. Rising interest rates in the second quarter of 2013 resulted in market value declines of our securities portfolio resulting in a $21.4 million change in unrealized gains/losses, a component of accumulated other comprehensive income, within shareholders’ equity.
Total shareholders’ equity decreased by $56.4 million during the quarter to $1.1 billion at June 30, 2013, primarily due to Capital Bank’s repurchase of 2,696,150 shares of its common stock at an average price of $17.63, completing the $50.0 million stock repurchase program authorized during the first quarter. Tangible book value per share was $17.75 as of June 30, 2013.
The Company’s national bank subsidiary, Capital Bank N.A., reported Tier 1, Tier 1 Risk-Based and Total Risk-Based capital ratios of 12.7%, 17.7% and 18.9%, respectively, as of June 30, 2013, under currently applicable regulations.
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) 457-2697, and the confirmation pass code is 7259082. 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. An on-line replay of the call will be available at the same time for 90 days. A telephonic replay of the conference call will be available through July 31, 2013, by dialing (719) 457-0820 and entering pass code 7259082.
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 annual report on Form 10-K and other periodic reports filed by us with the Securities and
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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: (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; (8) competitive pressures in our markets and industry; and (9) 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.
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 $6.8 billion in total assets as of June 30, 2013 and 162 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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July 24, 2013
CAPITAL BANK FINANCIAL CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
| For the Quarter Ended | ||||||||||||||||||||
June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | ||||||||||||||||
| Interest and dividend income | $ | 74,989 | $ | 76,814 | $ | 76,122 | $ | 69,438 | $ | 72,893 | ||||||||||
| Interest expense | 7,837 | 8,992 | 10,115 | 9,104 | 9,548 | |||||||||||||||
| Net Interest Income | 67,152 | 67,822 | 66,007 | 60,334 | 63,345 | |||||||||||||||
| Provision for loan losses | 3,868 | 6,904 | 4,370 | 5,771 | 6,608 | |||||||||||||||
| Non-Interest Income | ||||||||||||||||||||
| Service charges on deposit accounts | 6,335 | 6,342 | 6,630 | 5,058 | 6,332 | |||||||||||||||
| Debit card income | 2,979 | 2,836 | 2,724 | 2,442 | 2,589 | |||||||||||||||
| Fees on mortgage loans sold | 1,601 | 1,241 | 2,074 | 1,612 | 1,205 | |||||||||||||||
| Investment advisory and trust fees | 164 | 96 | 156 | 85 | 142 | |||||||||||||||
| FDIC indemnification asset (amortization) accretion | (1,108 | ) | (2,169 | ) | 317 | 850 | (164 | ) | ||||||||||||
| Investment securities gains, net | 205 | - | 9 | 4,918 | 933 | |||||||||||||||
| Other-than-temporary impairment losses on investments: | ||||||||||||||||||||
| Gross impairment loss | - | - | - | - | (38 | ) | ||||||||||||||
| Less: Impairments recognized in other comprehensive income | - | - | - | - | - | |||||||||||||||
| Net impairment losses recognized in earnings | - | - | - | - | (38 | ) | ||||||||||||||
| Other income | 3,330 | 2,563 | 3,528 | 5,303 | 1,180 | |||||||||||||||
| Total non-interest income | 13,506 | 10,909 | 15,438 | 20,268 | 12,179 | |||||||||||||||
| Non-Interest Expense | ||||||||||||||||||||
| Salaries & employee benefits | 22,660 | 20,819 | 24,661 | 21,295 | 21,654 | |||||||||||||||
| Non-cash equity compensation | 1,364 | 1,577 | 3,753 | 4,242 | 4,212 | |||||||||||||||
| Net occupancy expense | 10,503 | 10,730 | 11,031 | 9,355 | 9,584 | |||||||||||||||
| Foreclosed asset related expense | 6,229 | 6,822 | 9,222 | 9,649 | 5,150 | |||||||||||||||
| Loan workout expenses | 2,236 | 2,064 | 1,753 | 2,308 | 1,830 | |||||||||||||||
| Conversion and merger related expenses | 140 | 113 | 604 | 3,894 | 1,757 | |||||||||||||||
| Professional fees | 2,344 | 2,648 | 3,426 | 2,761 | 3,025 | |||||||||||||||
| CVR Expense | 187 | 2,610 | 94 | (179 | ) | - | ||||||||||||||
| Loss on extinguishment of debt | - | 308 | - | 2,946 | - | |||||||||||||||
| Legal settlement expense | - | - | - | 1,755 | 97 | |||||||||||||||
| Impairment of intangible asset | - | - | 202 | - | - | |||||||||||||||
| Other expenses | 13,478 | 13,349 | 13,702 | 11,345 | 11,325 | |||||||||||||||
| Total non-interest expense | 59,141 | 61,040 | 68,448 | 69,371 | 58,634 | |||||||||||||||
| Income before income taxes | 17,649 | 10,787 | 8,627 | 5,460 | 10,282 | |||||||||||||||
| Income tax expense (benefit) | 6,514 | 5,234 | 3,295 | (32,385 | ) | 3,909 | ||||||||||||||
| Net Income Before Attribution of Noncontrolling Interest | 11,135 | 5,553 | 5,332 | 37,845 | 6,373 | |||||||||||||||
| Net income attributable to non-controlling interests | - | - | - | 2,762 | 862 | |||||||||||||||
| Net income attributable to Capital Bank Financial Corp. | $ | 11,135 | $ | 5,553 | $ | 5,332 | $ | 35,083 | $ | 5,511 | ||||||||||
| Basic Earnings Per Common Share | $ | 0.21 | $ | 0.10 | $ | 0.10 | $ | 0.76 | $ | 0.12 | ||||||||||
| Diluted Earnings Per Common Share | $ | 0.21 | $ | 0.10 | $ | 0.10 | $ | 0.75 | $ | 0.12 | ||||||||||
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CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands, except per share data)
(Unaudited)
June 30, 2013 | March 31, 2013 | December 31, 2012 | ||||||||||
| Assets | ||||||||||||
| Cash and due from banks | $ | 99,958 | $ | 93,251 | $ | 142,361 | ||||||
| Interest-bearing deposits with banks | 56,505 | 417,206 | 592,375 | |||||||||
| Federal funds sold | - | - | 138 | |||||||||
| Total cash and cash equivalents | 156,463 | 510,457 | 734,874 | |||||||||
| Trading securities | 13 | - | - | |||||||||
| Investment securities available for sale | 1,258,752 | 1,131,957 | 1,006,744 | |||||||||
| Loans held for sale | 20,702 | 12,588 | 11,276 | |||||||||
| Loans, net of deferred loan costs and fees | 4,536,003 | 4,589,382 | 4,679,290 | |||||||||
| Less: Allowance for loan losses | 55,369 | 56,307 | 54,896 | |||||||||
| Loans, net | 4,480,634 | 4,533,075 | 4,624,394 | |||||||||
| Other real estate owned | 142,967 | 151,788 | 154,267 | |||||||||
| Indemnification asset | 38,730 | 44,261 | 49,417 | |||||||||
| Receivable from FDIC | 7,573 | 7,277 | 8,486 | |||||||||
| Premises and equipment, net | 186,368 | 197,171 | 198,457 | |||||||||
| Goodwill | 147,863 | 147,863 | 147,863 | |||||||||
| Intangible assets, net | 25,996 | 27,315 | 28,636 | |||||||||
| Deferred income tax asset, net | 202,056 | 194,548 | 198,424 | |||||||||
| Accrued interest receivable and other assets | 128,859 | 125,580 | 132,875 | |||||||||
| Total Assets | $ | 6,796,976 | $ | 7,083,880 | $ | 7,295,713 | ||||||
| Liabilities and Shareholders’ Equity | ||||||||||||
| Liabilities | ||||||||||||
| Deposits: | ||||||||||||
| Noninterest-bearing demand | $ | 909,428 | $ | 901,191 | $ | 895,274 | ||||||
| Negotiable order of withdrawal accounts | 1,266,388 | 1,274,185 | 1,288,742 | |||||||||
| Money market | 1,002,907 | 1,095,240 | 1,125,967 | |||||||||
| Savings | 511,616 | 508,992 | 492,187 | |||||||||
| Time deposits | 1,780,200 | 1,919,091 | 2,070,698 | |||||||||
| Total deposits | 5,470,539 | 5,698,699 | 5,872,868 | |||||||||
| Federal Home Loan Bank advances | 1,369 | 1,415 | 1,460 | |||||||||
| Short-term borrowings | 28,964 | 29,980 | 41,508 | |||||||||
| Long-term borrowings | 146,753 | 146,490 | 180,430 | |||||||||
| Accrued interest payable and other liabilities | 44,418 | 45,953 | 43,416 | |||||||||
| Total liabilities | 5,692,043 | 5,922,537 | 6,139,682 | |||||||||
| 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, 36,075 issued and 33,236 outstanding and 33,048 issued and 32,905 outstanding and 33,025 shares issued and outstanding, respectively | 360 | 330 | 330 | |||||||||
| Common stock-Class B $0.01 par value: 200,000 shares authorized, 19,783 and 22,798 and 22,821 shares issued and outstanding, respectively | 198 | 228 | 228 | |||||||||
| Additional paid in capital | 1,079,736 | 1,078,372 | 1,076,798 | |||||||||
| Retained earnings | 86,017 | 74,882 | 69,328 | |||||||||
| Accumulated other comprehensive (loss) income | (11,394 | ) | 9,986 | 9,347 | ||||||||
| Treasury stock, at cost, 2,839 and 143 and 0 shares, respectively | (49,984 | ) | (2,455 | ) | - | |||||||
| Total shareholders’ equity | 1,104,933 | 1,161,343 | 1,156,031 | |||||||||
| Total Liabilities and Shareholders’ Equity | $ | 6,796,976 | $ | 7,083,880 | $ | 7,295,713 | ||||||
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July 24, 2013
CAPITAL BANK FINANCIAL CORP.
(In thousands)
(Unaudited)
| As of | As of | As of | ||||||||||
| Loans | June 30, 2013 | March 31, 2013 | December 31, 2012 | |||||||||
| Non-owner occupied commercial real estate | $ | 805,235 | $ | 879,864 | $ | 895,187 | ||||||
| Other commercial construction and land | 358,719 | 400,708 | 405,481 | |||||||||
| Multifamily commercial real estate | 74,682 | 76,158 | 85,020 | |||||||||
| 1-4 family residential construction and land | 71,406 | 79,647 | 82,124 | |||||||||
| Total commercial real estate | 1,310,042 | 1,436,377 | 1,467,812 | |||||||||
| Owner occupied commercial real estate | 1,051,804 | 1,042,648 | 1,059,469 | |||||||||
| Commercial and industrial loans | 727,436 | 640,299 | 658,328 | |||||||||
| Total commercial | 1,779,240 | 1,682,947 | 1,717,797 | |||||||||
| 1-4 family residential | 825,738 | 825,978 | 836,112 | |||||||||
| Home equity loans | 397,169 | 417,843 | 430,667 | |||||||||
| Other consumer loans | 147,004 | 137,658 | 137,157 | |||||||||
| Total consumer | 1,369,911 | 1,381,479 | 1,403,936 | |||||||||
| Other | 97,512 | 101,167 | 101,021 | |||||||||
| Total loans | $ | 4,556,705 | $ | 4,601,970 | $ | 4,690,566 | ||||||
| Deposits | ||||||||||||
| Noninterest-bearing demand | $ | 909,428 | $ | 901,191 | $ | 895,274 | ||||||
| Negotiable order of withdrawal accounts | 1,266,388 | 1,274,185 | 1,288,742 | |||||||||
| Money market | 1,002,907 | 1,095,240 | 1,125,967 | |||||||||
| Savings | 511,616 | 508,992 | 492,187 | |||||||||
| Time deposits | 1,780,200 | 1,919,091 | 2,070,698 | |||||||||
| Total deposits | $ | 5,470,539 | $ | 5,698,699 | $ | 5,872,868 | ||||||
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July 24, 2013
CAPITAL BANK FINANCIAL CORP.
(Dollars and shares in thousands, except per share data)
(Unaudited)
| As of or for the Quarter Ended | ||||||||||||||||||||
June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | ||||||||||||||||
| Net loan charge-offs (recoveries) | $ | 4,806 | $ | 5,493 | $ | 1,060 | $ | (344 | ) | $ | 1,744 | |||||||||
| Allowance for loan losses | $ | 55,369 | $ | 56,307 | $ | 54,896 | $ | 51,587 | $ | 45,472 | ||||||||||
| Allowance for loan losses/ total loans | 1.22 | % | 1.22 | % | 1.17 | % | 1.27 | % | 1.08 | % | ||||||||||
| Non-accrual loans | $ | 11,040 | $ | 18,353 | $ | 13,980 | $ | 11,192 | $ | 12,544 | ||||||||||
| Acquired impaired loans >90 days past due and still accruing | $ | 294,631 | $ | 341,290 | $ | 352,700 | $ | 326,453 | $ | 337,692 | ||||||||||
| Annualized net charge-offs/average loans | 0.42 | % | 0.47 | % | 0.09 | % | N/A | 0.17 | % | |||||||||||
| Total interest-earning assets | $ | 5,912,157 | $ | 6,187,189 | $ | 6,328,902 | $ | 5,459,668 | $ | 5,520,236 | ||||||||||
| Other real estate owned | $ | 142,967 | $ | 151,788 | $ | 154,267 | $ | 144,621 | $ | 158,235 | ||||||||||
| Goodwill and intangibles, net of accumulated amortization | $ | 173,859 | $ | 175,178 | $ | 176,499 | $ | 139,330 | $ | 140,367 | ||||||||||
| Tax equivalent net interest margin | 4.47 | % | 4.41 | % | 4.11 | % | 4.45 | % | 4.60 | % | ||||||||||
| Efficiency ratio | 73.32 | % | 77.53 | % | 84.04 | % | 86.07 | % | 77.64 | % | ||||||||||
| ROAA | 0.64 | % | 0.31 | % | 0.29 | % | 2.44 | % | 0.40 | % | ||||||||||
| ROAE | 3.90 | % | 1.91 | % | 1.85 | % | 14.68 | % | 2.52 | % | ||||||||||
| Average diluted common shares outstanding | 54,062 | 55,493 | 55,401 | 46,738 | 45,632 | |||||||||||||||
| End of quarter common shares outstanding | 53,019 | 55,703 | 55,846 | 55,844 | 46,457 | |||||||||||||||
| Average equity | $ | 1,142,535 | $ | 1,165,700 | $ | 1,153,108 | $ | 1,031,230 | $ | 1,010,740 | ||||||||||
| Total equity | $ | 1,104,933 | $ | 1,161,343 | $ | 1,156,031 | $ | 1,150,131 | $ | 1,017,683 | ||||||||||
| Book value per common share | $ | 20.84 | $ | 20.85 | $ | 20.70 | $ | 20.60 | $ | 20.26 | ||||||||||
| Tangible book value per common share | $ | 17.75 | $ | 17.89 | $ | 17.74 | $ | 18.26 | $ | 17.69 | ||||||||||
| Tier 1 capital to average assets - Capital Bank, N.A. | 12.7 | % | 12.1 | % | 11.7 | % | 12.0 | % | 11.4 | % | ||||||||||
| Tier 1 capital to risk weighted assets – Capital Bank, N.A. | 17.7 | % | 17.4 | % | 17.1 | % | 17.5 | % | 16.4 | % | ||||||||||
| Total capital to risk weighted assets – Capital Bank, N.A. | 18.9 | % | 18.7 | % | 18.3 | % | 18.8 | % | 17.6 | % | ||||||||||
| Average assets | $ | 6,945,099 | $ | 7,182,044 | $ | 7,351,688 | $ | 6,198,852 | $ | 6,355,081 | ||||||||||
| Total assets | $ | 6,796,976 | $ | 7,083,880 | $ | 7,295,713 | $ | 6,237,178 | $ | 6,303,884 | ||||||||||
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CBF Reports Second-Quarter Results
Page 11
July 24, 2013
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
Quarter Ended June 30, 2013 | Quarter Ended March 31, 2013 | |||||||||||||||||||||||
Average Balances | Interest* | Yield* | Average Balances | Interest* | Yield* | |||||||||||||||||||
| Loans | $ | 4,562,295 | $ | 70,163 | 6.17 | % | $ | 4,628,838 | $ | 72,664 | 6.37 | % | ||||||||||||
| Investments | 1,292,249 | 4,525 | 1.40 | % | 1,006,647 | 3,549 | 1.43 | % | ||||||||||||||||
| Interest bearing deposits | 164,784 | 102 | 0.25 | % | 586,345 | 371 | 0.26 | % | ||||||||||||||||
| Federal Home Loan Bank stock | 36,278 | 462 | 5.11 | % | 38,866 | 490 | 5.11 | % | ||||||||||||||||
| Total interest earning assets | 6,055,606 | 75,252 | 4.98 | % | 6,260,696 | 77,074 | 4.99 | % | ||||||||||||||||
| Non-interest earning assets | 889,493 | 921,348 | ||||||||||||||||||||||
| Total assets | $ | 6,945,099 | $ | 7,182,044 | ||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||
| Time | $ | 1,853,592 | $ | 4,598 | 0.99 | % | $ | 1,986,343 | $ | 5,035 | 1.03 | % | ||||||||||||
| Money market | 1,055,635 | 575 | 0.22 | % | 1,113,841 | 629 | 0.23 | % | ||||||||||||||||
| NOW | 1,263,133 | 499 | 0.16 | % | 1,275,914 | 555 | 0.18 | % | ||||||||||||||||
| Savings | 506,997 | 255 | 0.20 | % | 503,714 | 258 | 0.21 | % | ||||||||||||||||
| Total interest-bearing deposits | 4,679,357 | 5,927 | 0.51 | % | 4,879,812 | 6,477 | 0.54 | % | ||||||||||||||||
| Short-term borrowings and FHLB advances | 38,794 | 15 | 0.16 | % | 43,250 | 14 | 0.13 | % | ||||||||||||||||
| Long-term borrowings | 142,541 | 1,894 | 5.33 | % | 170,912 | 2,499 | 5.93 | % | ||||||||||||||||
| Total interest bearing liabilities | 4,860,692 | 7,836 | 0.65 | % | 5,093,974 | 8,990 | 0.72 | % | ||||||||||||||||
| Non-interest bearing deposits | 903,637 | 888,834 | ||||||||||||||||||||||
| Other liabilities | 38,235 | 33,536 | ||||||||||||||||||||||
| Shareholders’ equity | 1,142,535 | 1,165,700 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 6,945,099 | $ | 7,182,044 | ||||||||||||||||||||
| Net interest income and spread | $ | 67,416 | 4.34 | % | $ | 68,084 | 4.28 | % | ||||||||||||||||
| Net interest margin | 4.47 | % | 4.41 | % | ||||||||||||||||||||
_______
* Presented on a fully tax equivalent basis
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CBF Reports Second-Quarter Results
Page 12
July 24, 2013
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
Quarter Ended June 30, 2013 | Quarter Ended June 30, 2012 | |||||||||||||||||||||||
Average Balances | Interest* | Yield* | Average Balances | Interest* | Yield* | |||||||||||||||||||
| Loans | $ | 4,562,295 | $ | 70,163 | 6.17 | % | $ | 4,210,746 | $ | 66,682 | 6.37 | % | ||||||||||||
| Investments | 1,292,249 | 4,525 | 1.40 | % | 1,215,494 | 5,931 | 1.96 | % | ||||||||||||||||
| Interest bearing deposits | 164,784 | 102 | 0.25 | % | 101,657 | 65 | 0.26 | % | ||||||||||||||||
| Federal Home Loan Bank stock | 36,278 | 462 | 5.11 | % | 37,966 | 488 | 5.17 | % | ||||||||||||||||
| Total interest earning assets | 6,055,606 | 75,252 | 4.98 | % | 5,565,863 | 73,166 | 5.29 | % | ||||||||||||||||
| Non-interest earning assets | 889,493 | 789,219 | ||||||||||||||||||||||
| Total assets | $ | 6,945,099 | $ | 6,355,082 | ||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||
| Time | $ | 1,853,592 | $ | 4,598 | 0.99 | % | $ | 1,982,499 | $ | 5,336 | 1.08 | % | ||||||||||||
| Money market | 1,055,635 | 575 | 0.22 | % | 902,334 | 1,000 | 0.45 | % | ||||||||||||||||
| NOW | 1,263,133 | 499 | 0.16 | % | 1,069,756 | 691 | 0.26 | % | ||||||||||||||||
| Savings | 506,997 | 255 | 0.20 | % | 360,347 | 276 | 0.31 | % | ||||||||||||||||
| Total interest-bearing deposits | 4,679,357 | 5,927 | 0.51 | % | 4,314,936 | 7,303 | 0.68 | % | ||||||||||||||||
| Short-term borrowings and FHLB advances | 38,794 | 15 | 0.16 | % | 132,517 | 317 | 0.96 | % | ||||||||||||||||
| Long-term borrowings | 142,541 | 1,894 | 5.33 | % | 135,477 | 1,928 | 5.72 | % | ||||||||||||||||
| Total interest bearing liabilities | 4,860,692 | 7,836 | 0.65 | % | 4,582,930 | 9,548 | 0.84 | % | ||||||||||||||||
| Non-interest bearing deposits | 903,637 | 722,929 | ||||||||||||||||||||||
| Other liabilities | 38,235 | 35,483 | ||||||||||||||||||||||
| Shareholders’ equity | 1,142,535 | 1,010,740 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 6,945,099 | $ | 6,355,082 | ||||||||||||||||||||
| Net interest income and spread | $ | 67,416 | 4.34 | % | $ | 63,618 | 4.45 | % | ||||||||||||||||
| Net interest margin | 4.47 | % | 4.60 | % | ||||||||||||||||||||
_______
* Presented on a fully tax equivalent basis
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CBF Reports Second-Quarter Results
Page 13
July 24, 2013
CAPITAL BANK FINANCIAL CORP.
SIX MONTH AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
Six Months Ended June 30, 2013 | Six Months Ended June 30, 2012 | |||||||||||||||||||||||
Average Balances | Interest* | Yield* | Average Balances | Interest* | Yield* | |||||||||||||||||||
| Loans | $ | 4,595,383 | $ | 142,827 | 6.27 | % | $ | 4,233,066 | $ | 134,959 | 6.41 | % | ||||||||||||
| Investments | 1,150,237 | 8,074 | 1.42 | % | 1,127,866 | 11,559 | 2.06 | % | ||||||||||||||||
| Interest bearing deposits | 374,399 | 473 | 0.25 | % | 260,054 | 296 | 0.23 | % | ||||||||||||||||
| Federal Home Loan Bank stock | 37,565 | 952 | 5.11 | % | 38,346 | 833 | 4.37 | % | ||||||||||||||||
| Total interest earning assets | 6,157,584 | 152,326 | 4.99 | % | 5,659,332 | 147,647 | 5.25 | % | ||||||||||||||||
| Non-interest earning assets | 905,332 | 796,585 | ||||||||||||||||||||||
| Total assets | $ | 7,062,916 | $ | 6,455,917 | ||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||
| Time | 1,919,601 | 9,635 | 1.01 | % | $ | 2,050,458 | 10,799 | 1.06 | % | |||||||||||||||
| Money market | 1,084,577 | 1,204 | 0.22 | % | 899,727 | 2,299 | 0.51 | % | ||||||||||||||||
| NOW | 1,269,488 | 1,054 | 0.17 | % | 1,075,672 | 1,516 | 0.28 | % | ||||||||||||||||
| Savings | 505.365 | 512 | 0.20 | % | 334,514 | 543 | 0.33 | % | ||||||||||||||||
| Total interest-bearing deposits | 4,779,031 | 12,405 | 0.52 | % | 4,360,371 | 15,157 | 0.70 | % | ||||||||||||||||
| Short-term borrowings and FHLB advances | 41,009 | 29 | 0.14 | % | 174,999 | 807 | 0.93 | % | ||||||||||||||||
| Long-term borrowings | 156,648 | 4,394 | 5.66 | % | 135,247 | 3,872 | 5.76 | % | ||||||||||||||||
| Total interest bearing liabilities | 4,976,688 | 16,828 | 0.68 | % | 4,670,617 | 19,836 | 0.85 | % | ||||||||||||||||
| Non-interest bearing deposits | 896,277 | 736,618 | ||||||||||||||||||||||
| Other liabilities | 35,898 | 44,212 | ||||||||||||||||||||||
| Shareholders’ equity | 1,154,053 | 1,004,470 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,062,916 | $ | 6,455,917 | ||||||||||||||||||||
| Net interest income and spread | $ | 135,498 | 4.31 | % | $ | 127,811 | 4.39 | % | ||||||||||||||||
| Net interest margin | 4.44 | % | 4.54 | % | ||||||||||||||||||||
_______
* Presented on a fully tax equivalent basis
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CBF Reports Second-Quarter Results
Page 14
July 24, 2013
CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES
| CORE NET INCOME | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||
| Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||||
| June 30, 2013 | June 30, 2013 | March 31, 2013 | March 31, 2013 | |||||||||||||
| Net income | $ | 11.1 | $ | 11.1 | $ | 5.6 | $ | 5.6 | ||||||||
| Adjustments | Pre-Tax | After-Tax | Pre-Tax | After-Tax | ||||||||||||
| Non-Interest Income | ||||||||||||||||
| Security gains | (0.2 | ) | (0.1 | ) | - | - | ||||||||||
| Non-Interest Expense | ||||||||||||||||
| Non-cash equity compensation* | 1.3 | 0.8 | 1.6 | 0.9 | ||||||||||||
| CVR Valuation (other expense) | 0.2 | 0.2 | 2.6 | 2.6 | ||||||||||||
| Conversion and severance expense*(conversion and merger expense and salaries and employee benefits) | 0.1 | 0.1 | - | - | ||||||||||||
| Legal and Merger fees (professional fees) | - | - | 0.1 | 0.1 | ||||||||||||
| Loss on extinguishment of debt* | - | - | 0.3 | 0.2 | ||||||||||||
| Taxes | ||||||||||||||||
| Tax effect of adjustments* | (0.4 | ) | N/A | (0.8 | ) | N/A | ||||||||||
| Core Net Income | $ | 12.1 | $ | 12.1 | $ | 9.4 | $ | 9.4 | ||||||||
| Average Assets | $ | 6,945 | $ | 7,182 | ||||||||||||
| Core ROAA** | 0.69 | % | 0.52 | % | ||||||||||||
*Tax effected at an income tax rate of 39%
** Core ROAA: Annualized core net income / average assets
TANGIBLE BOOK VALUE
| (In thousands, except per share data) | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | |||||||||||||||
| Total shareholders’ equity | $ | 1,104,933 | $ | 1,161,343 | $ | 1,156,031 | $ | 1,150,131 | $ | 1,017,683 | ||||||||||
| Less: Noncontrolling interest | - | - | - | - | (76,610 | ) | ||||||||||||||
| Less: CBF proportional share of goodwill, core deposit intangibles, net of taxes*** | (163,742 | ) | (164,548 | ) | (165,354 | ) | (130,234 | ) | (119,097 | ) | ||||||||||
| Tangible book value | $ | 941,191 | $ | 996,795 | $ | 990,677 | $ | 1,019,897 | $ | 821,976 | ||||||||||
| Common shares outstanding | 53,019 | 55,703 | 55,846 | 55,844 | 46,457 | |||||||||||||||
| Tangible book value per share**** | $ | 17.75 | $ | 17.89 | $ | 17.74 | $ | 18.26 | $ | 17.69 | ||||||||||
| *** | Proportional share is calculated based upon the Company’s 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-