Capital Bank Financial
Jul 24, 2014

Capital Bank Financial Corp. Reports Second Quarter Net Income of $12.4 Million or $0.25 Per Diluted Share, Up 47% Year Over Year

CORAL GABLES, Fla., July 24, 2014 (GLOBE NEWSWIRE) -- Capital Bank Financial Corp. (Nasdaq:CBF) (the "Company") today reported second quarter 2014 net income of $12.4 million, or $0.25 per diluted share, and core net income of $13.1 million, or $0.26 per diluted share. Net income rose 32% year over year and net income per diluted share rose 47%. Core net income rose 22% year over year and core net income per diluted share rose 30%. This resulted in a ROA of 76 basis points and a core ROA of 80 basis points, both of which reflect continued improvements on a sequential and year-over-year basis.

Core adjustments for the second quarter of 2014 included $0.3 million of non-cash equity compensation associated with original founder awards and $0.3 million of contingent value right ("CVR") expense. The reconciliation of non-GAAP measures (including core net income, core efficiency ratio, core ROA, 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 Financial Corp., commented, "Record new loans, combined with reduced run-off from the legacy book, resulted in positive 16% net growth this quarter. I am very pleased with the quality of the new loan book and with the momentum in checking account sales in our retail branches."

Chris Marshall, Chief Financial Officer of Capital Bank Financial Corp., added, "This quarter's improvement in growth and profitability reflects consistent execution by talented teammates throughout the bank. At the same time, we are maintaining our disciplined approach to risk management, which is evident in the bank's diversified portfolio, strong credit quality, and conservative interest rate risk profile."

Loan Portfolio and Composition

During the second quarter, the loan portfolio increased by $175.7 million to $4.7 billion, an annualized growth rate of 16%. New loans of $441.7 million were offset by resolutions totaling $69.8 million, including transfers to OREO of $8.2 million, and principal repayments of $196.2 million.

The relative composition of the Company's loan portfolio at the end of the second and first quarters of 2014 and fourth quarter of 2013 was as follows:

  June 30,
2014
March 31,
2014
December 31,
2013
Commercial real estate 25% 26% 27%
C&I 42% 41% 41%
Consumer 31% 30% 30%
Other 2% 3% 2%
Total 100% 100% 100%

Deposits, Composition and Yields

During the second quarter, total deposits remained consistent at $5.2 billion. The cost of deposits remained flat at 0.33% from the first quarter of 2014 and declined ten basis points from the second quarter of 2013. Continued planned shrinkage in high-cost legacy time deposits drove the improvement year over year. The cost of core deposits remained flat at 0.14% sequentially and year over year. Core deposits include all checking, savings and money market accounts and now represent 73.7% of total deposits.

Net Interest Income and Net Interest Margin

Net interest income declined $1.6 million to $60.8 million from $62.5 million for the first quarter of 2014 and $4.5 million from $65.4 million for the second quarter of 2013. The net interest margin for the second quarter of 2014 was 4.26%, a decline of fifteen basis points sequentially and six basis points year over year. The decline over the first quarter reflects the lower rate of new loans, as compared to the rate on our legacy portfolio. The rate on new loans was 3.50% in the quarter, down from 4.00% in the prior quarter. This decline was driven by a significant shift in customer preference for variable rate financing. The percentage of new loans with variable rates increased to 65% in the quarter, as compared to 54% in the prior quarter.

Non-Interest Income

Non-interest income increased $0.5 million to $11.9 million for the second quarter of 2014 from $11.4 million for the first quarter of 2014 and declined $1.6 million from $13.5 million for the second quarter of 2013.  The decline year over year was mainly driven by an increase of $1.0 million in FDIC indemnification asset amortization as a result of lower credit loss expectations in our legacy loan portfolios.

Provision for Loan Losses and Credit Quality

The provision for loan losses of $1.4 million recorded for the second quarter of 2014 includes a $2.3 million provision for new and acquired non-impaired loans and $0.9 million in reversals of impairments due to improvements in cash flow estimates for certain acquired impaired loan pools.  Net charge-offs for the second quarter of 2014 were $1.7 million.    

The provision for new and acquired non-impaired loans served to increase the related allowance to $20.8 million, or 0.78% of the $2.7 billion in new and acquired non-impaired loans outstanding.

During the second quarter, non-performing loans declined by $24.9 million, or 11% sequentially to $212.1 million. Acquired impaired loans greater than 90 days past due and still accruing declined by $26.2 million sequentially, or 12% to $200.8 million. Nonaccrual loans increased to 0.37% of total non-purchased credit impaired loans from 0.36%, at the end of the first quarter. 

Non-Interest Expense

Non-interest expense declined to $51.3 million for the second quarter of 2014 from $55.2 million for the first quarter of 2014 and declined from $59.4 million for the second quarter of 2013.  The sequential and year over year decline was largely driven by lower legacy credit expenses reflecting the continued resolution of special assets.

OREO valuation and foreclosed asset related expenses, net of gains on sale, declined $3.5 million and $5.4 million sequentially and year over year, respectively. OREO sales during the quarter resulted in a $29.2 million reduction of the OREO balance, approximately 20%, to $96.3 million at June 30, 2014. 

Income Tax Expense

Income tax expense was $7.6 million for the second quarter of 2014, an effective income tax rate of 38.0%. Income tax expense was $7.2 million for the first quarter of 2014, an effective income tax rate of 38.7%. The higher first quarter effective rate was due to the change in value of the CVR in connection with the Company's legacy Green Bankshares portfolio. The change in estimated value of the CVR is not deductible for income tax purposes. Income tax expense was $5.6 million for the second quarter of 2013, an effective income tax rate of 37.2%.  The lower prior year second quarter effective rate was due to higher tax-exempt interest income compared to the current quarter. 

Financial Position

Total assets increased by $75.0 million to $6.6 billion as of June 30, 2014 from $6.5 billion as of March 31, 2014. During the quarter, the Company's loan portfolio increased by $175.7 million to $4.5 billion, an annualized growth rate of 16%. Cash and investment securities declined by $70.9 million to fund loan growth and the repurchase of 1.8 million shares of common stock at an average price of $24.04 per share. In addition, the Company's Board of Directors has authorized a $50.0 million increase in our common stock repurchase authorization. While deposits remained flat, FHLB borrowings increased by $140.0 million. Tangible book value per share was $18.85 as of June 30, 2014, an increase of $0.16 and $0.84 over March 31, 2014 and June 30, 2013, respectively.

The Company's national bank subsidiary, Capital Bank N.A., has preliminary Tier 1, Tier 1 Risk-Based and Total Risk-Based capital ratios of 14.1%, 18.0% and 19.2%, respectively, as of June 30, 2014, 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) 325-2464, and the confirmation pass code is 1013515. Please dial in 10 minutes prior to the beginning of the call. A telephonic replay of the conference call will be available through August 2, 2014, by dialing (719) 457-0820 and entering pass code 1013515. The 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 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 annual report on Form 10-K 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: (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 any acquired businesses into our business model; (7) projected population and income growth in our targeted market areas; (8) competitive pressures in our markets and industry; (9) our ability to attract and retain key personnel; (10) changes in accounting policies or judgments and (11) 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.

Use of Non-GAAP Financial Measures

Core net income, core efficiency ratio, core return-on-assets ("core ROA"), tangible book value and tangible book value per share are each non-GAAP measures used in this report. A reconciliation to the most directly comparable GAAP financial measures - net income in the case of core net income and core ROA, total non-interest income and total non-interest expense in the case of core efficiency ratio, and total shareholders' equity in the case of tangible book value and tangible book value per share - appears in tabular form at the end of this release. The Company believes each of core net income, core efficiency ratio, and core ROA is useful for both investors and management to understand the effects of certain non-interest items and provides an alternative view of the Company's performance over time and in comparison to the Company's competitors. Neither core net income, core efficiency ratio, nor core ROA should be viewed as a substitute for net income. The Company believes that tangible book value and tangible book value per share are useful for both investors and management as these are measures commonly used by financial institutions, regulators and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company's capital over time and in comparison to its competitors. These measures should not be viewed as a substitute for total shareholders' equity. 

These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analyses of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. 

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 $6.6 billion in total assets as of June 30, 2014, and 162 full-service banking offices throughout Florida, North and South Carolina, Tennessee and Virginia. To learn more about Capital Bank, N.A., please visit www.capitalbank-us.com

CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
 
  Three Months Ended
  June 30,
2014
March 31,
2014
Dec. 31,
2013
Sept. 30,
2013
June 30,
2013
Interest and dividend income $ 66,846 $ 68,543 $ 71,981 $ 72,480 $ 73,189
Interest expense 6,015 6,090 6,258 7,094 7,837
Net Interest Income 60,831 62,453 65,723 65,386 65,352
Provision (reversal) for loan losses 1,404 (24) 3,265 984 4,467
Non-Interest Income          
Service charges on deposit accounts 5,672 5,436 5,858 6,034 6,335
Debit card income 3,103 2,844 2,864 2,854 2,979
Fees on mortgage loans originated and sold 1,123 759 1,082 1,477 1,601
Investment advisory and trust fees 910 1,261 1,075 740 357
FDIC indemnification asset expense (2,064) (2,165) (1,877) (502) (1,108)
Investment securities (losses) gains, net (28) 174 164 (247) 205
Other-than-temporary impairment losses on investments:          
Gross impairment loss - - - (54) -
Less: Impairments recognized in other comprehensive income - - - - -
Net impairment losses recognized in earnings - - - (54) -
Other income 3,171 3,060 4,105 4,978 3,137
Total non-interest income 11,887 11,369 13,271 15,280 13,506
Non-Interest Expense          
Salaries and employee benefits 23,449 23,498 23,969 22,668 22,638
Stock-based compensation expense 1,020 728 1,127 1,371 1,364
Net occupancy and equipment expense 8,723 8,599 8,457 8,866 8,686
OREO valuation expense 3,022 3,573 3,190 6,045 6,209
(Gain) loss on sales of OREO (3,192) (721) (278) 188 (2,205)
Foreclosed asset related expense 991 1,459 1,046 1,265 2,225
Loan workout expense 1,117 1,177 1,682 2,063 2,236
Conversion and merger related expense - - - (19) 140
Professional fees 2,038 2,004 2,409 2,426 2,344
Contingent value right expense (income) 327 767 298 (776) 428
Gain on extinguishment of debt - - - (430) -
Software expense 1,940 1,868 1,990 1,874 1,817
Other expense 11,838 12,272 12,361 13,722 13,500
Total non-interest expense 51,273 55,224 56,251 59,263 59,382
Income before income taxes 20,041 18,622 19,478 20,419 15,009
Income tax expense 7,616 7,208 7,272 8,975 5,580
Net income $ 12,425 $ 11,414 $ 12,206 $ 11,444 $ 9,429
Basic earnings per share $ 0.25 $ 0.23 $ 0.24 $ 0.22 $ 0.18
Diluted earnings per share $ 0.25 $ 0.22 $ 0.23 $ 0.22 $ 0.17

 

CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)
(Unaudited)
 
  June 30,
2014
March 31,
2014
Dec. 31,
2013
Assets      
Cash and due from banks $ 109,963 $ 122,145 $ 118,937
Interest-bearing deposits with banks 31,070 52,735 45,504
Total cash and cash equivalents 141,033 174,880 164,441
Trading securities 6,515 6,562 6,348
Investment securities available-for-sale at fair value (amortized cost $591,668, $658,971 and $688,717, respectively) 594,745 657,788 685,441
Investment securities held-to-maturity at amortized cost (fair value $480,971, $449,739 and $459,693, respectively) 475,167 449,131 465,098
Loans held for sale 9,926 4,833 8,012
Loans, net of deferred loan costs and fees 4,712,249 4,541,652 4,544,017
Less: Allowance for loan losses 55,307 55,606 56,851
Loans, net 4,656,942 4,486,046 4,487,166
Other real estate owned 96,283 120,270 129,396
FDIC indemnification asset 25,529 28,744 33,610
Receivable from FDIC 4,578 5,832 7,624
Premises and equipment, net 177,568 178,629 179,855
Goodwill 134,522 134,522 131,987
Intangible assets, net 20,876 22,111 23,365
Deferred income tax asset, net 148,432 158,074 166,762
Other assets 131,890 121,202 128,456
Total Assets $ 6,624,006 $ 6,548,624 $ 6,617,561
Liabilities and Shareholders' Equity      
Liabilities      
Deposits:      
Noninterest-bearing demand $ 1,000,049 $ 1,000,914 $ 923,993
Negotiable order of withdrawal accounts 1,319,667 1,326,555 1,321,903
Money market 953,446 945,354 961,526
Savings 528,567 536,948 530,144
Time deposits 1,359,727 1,382,422 1,447,497
Total deposits 5,161,456 5,192,193 5,185,063
Federal Home Loan Bank advances 161,185 21,231 96,278
Short-term borrowings 32,814 30,453 24,850
Long-term borrowings 139,116 138,837 138,561
Other liabilities 55,877 62,154 60,021
Total liabilities 5,550,448 5,444,868 5,504,773
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, 36,654 issued and 30,925 outstanding, 36,405 issued and 32,475 outstanding and 36,212 issued and 33,051 outstanding, respectively.  367 364 362
Common stock-Class B $0.01 par value: 200,000 shares authorized, 19,025 issued and 18,225 outstanding, 19,454 issued and 18,654 outstanding and 19,647 issued and 19,047 outstanding, respectively. 190 194 196
Additional paid in capital 1,080,735 1,082,963 1,082,235
Retained earnings 131,324 118,899 107,485
Accumulated other comprehensive loss (3,212) (6,042) (7,528)
Treasury stock, at cost, 6,528, 4,730 and 3,761 shares, respectively (135,846) (92,622) (69,962)
Total shareholders' equity 1,073,558 1,103,756 1,112,788
Total Liabilities and Shareholders' Equity $ 6,624,006 $ 6,548,624 $ 6,617,561

 

CAPITAL BANK FINANCIAL CORP.
KEY METRICS
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended
  June 30,
2014
March 31,
2014
Dec. 31,
2013
Sept. 30,
2013
June 30,
2013
Performance Ratios          
Interest rate spread 4.12% 4.28% 4.39% 4.32% 4.19%
Net interest margin 4.26% 4.41% 4.52% 4.45% 4.32%
Return on average assets 0.76% 0.70% 0.74% 0.69% 0.54%
Return on average shareholders' equity 4.58% 4.09% 4.39% 4.12% 3.30%
Efficiency ratio 70.51% 74.81% 71.21% 73.47% 75.30%
Average interest-earning assets to average interest-bearing liabilities 131.23% 129.81% 129.70% 127.15% 125.45%
Average loans receivable to average deposits 89.10% 88.18% 85.88% 84.58% 82.47%
Yield on interest-earning assets 4.67% 4.83% 4.95% 4.93% 4.83%
Cost on interest-bearing liabilities 0.55% 0.56% 0.56% 0.61% 0.65%
Asset and Credit Quality Ratios-Total Loans          
Non-accrual loans $ 11,368 $ 10,107 $ 11,810 $ 13,824 $ 11,054
Acquired impaired loans > 90 days past due and still accruing $ 200,755 $ 226,941 $ 253,817 $ 261,470 $ 300,452
Nonperforming loans to loans receivable 4.49% 5.21% 5.84% 6.15% 6.77%
Nonperforming assets to total assets 4.66% 5.47% 5.98% 6.14% 6.68%
Covered loans to total gross loans 5.09% 5.71% 6.27% 7.03% 7.47%
ALLL to nonperforming assets 17.93% 15.52% 14.38% 13.91% 12.50%
ALLL to total gross loans 1.17% 1.22% 1.25% 1.26% 1.24%
Annualized net charge-offs/average loans 0.15% 0.11% 0.08% 0.04% 0.42%
Asset and Credit Quality Ratios-New Loans          
Nonperforming new loans to total new loans receivable 0.21% 0.24% 0.34% 0.45% 0.34%
New loans ALLL to total gross new loans 0.74% 0.80% 0.80% 0.82% 0.83%
Asset and Credit Quality Ratios-Acquired Loans          
Nonperforming acquired loans to total acquired loans receivable 10.25% 10.67% 11.16% 10.61% 11.08%
Covered acquired loans to total gross acquired loans 11.95% 11.98% 12.34% 12.53% 12.47%
Acquired loans ALLL to total gross acquired loans 1.76% 1.68% 1.69% 1.61% 1.51%
Capital Ratios (Company)          
Total average shareholders' equity to total average assets 16.64% 17.01% 16.85% 16.64% 16.40%
Tangible common equity ratio (1) 14.19% 14.82% 14.82% 14.76% 14.21%
Tier 1 leverage ratio (2) 14.61% 14.94% 14.95% 14.47% 13.84%
Tier 1 risk-based capital ratio (2) 18.57% 19.68% 19.74% 19.72% 19.22%
Total risk-based capital ratio (2) 19.77% 20.92% 21.00% 21.00% 20.48%
Capital Ratios (Bank)          
Tangible common equity ratio (1) 15.11% 14.99% 14.62% 14.43% 15.28%
Tier 1 leverage ratio (2) 14.10% 13.70% 13.40% 12.80% 13.50%
Tier 1 risk-based capital ratio (2) 18.00% 18.10% 17.70% 17.40% 18.70%
Total risk-based capital ratio (2) 19.20% 19.30% 18.90% 18.70% 19.90%
           
 (1) See "Reconciliation of Non-GAAP Measures"
 (2) June 30, 2014 regulatory capital ratios are preliminary

 

CAPITAL BANK FINANCIAL CORP.
LOANS AND DEPOSITS
(Dollars in thousands)
(Unaudited)
 
  June 30,
2014
March 31,
2014
Dec. 31,
2013
Loans      
Non-owner occupied commercial real estate $ 793,733 $ 790,698 $ 775,733
Other commercial construction and land 243,671 256,190 300,494
Multifamily commercial real estate 62,793 68,701 67,688
1-4 family residential construction and land 80,160 79,508 71,351
Total commercial real estate 1,180,357 1,195,097 1,215,266
Owner occupied commercial real estate 1,040,533 1,061,571 1,058,148
Commercial and industrial 932,800 806,359 803,736
Leases 2,346 2,513 2,676
Total commercial 1,975,679 1,870,443 1,864,560
1-4 family residential 863,897 801,573 804,322
Home equity 380,767 382,946 386,366
Other consumer 213,639 183,611 170,526
Total consumer 1,458,303 1,368,130 1,361,214
Other 107,836 112,815 110,989
Total loans $ 4,722,175 $ 4,546,485 $ 4,552,029
Deposits      
Non-interest bearing demand $ 1,000,049 $ 1,000,914 $ 923,993
Negotiable order of withdraw accounts 1,319,667 1,326,555 1,321,903
Money market 953,446 945,354 961,526
Savings 528,567 536,948 530,144
Total core deposits 3,801,729 3,809,771 3,737,566
Time deposits 1,359,727 1,382,422 1,447,497
Total deposits $ 5,161,456 $ 5,192,193 $ 5,185,063

 

CAPITAL BANK FINANCIAL CORP.
LEGACY CREDIT EXPENSES
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended
  June 30,
2014
March 31,
2014
Dec. 31,
2013
Sept. 30,
2013
June 30,
2013
Provision (reversal) on legacy loans $ (940) $ (2,488) $ (1,220) $ (72) $ 2,500
FDIC indemnification asset expense 2,064 2,165 1,877 502 1,108
OREO valuation expense 3,022 3,573 3,190 6,045 6,209
(Gains) loss on sale of OREO (3,192) (721) (278) 188 (2,205)
Foreclosed asset related expense 991 1,459 1,046 1,265 2,225
Loan workout expense 1,117 1,177 1,682 2,063 2,236
Salaries and employee benefits 1,300 1,300 1,300 1,300 1,300
Total legacy credit expenses $ 4,362 $ 6,465 $ 7,597 $ 11,291 $ 13,373

 

 
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended
June 30, 2014
Three Months Ended
March 31, 2014
  Average
Balances
 
Interest*
 
Yield*
Average
Balances
 
Interest*
 
Yield*
Interest earning assets            
Loans $ 4,593,337 $ 61,826 5.40% $ 4,542,255 $ 63,404 5.66%
Investments 1,060,611 4,648 1.76% 1,141,231 4,801 1.71%
Interest bearing deposits 62,172 37 0.24% 47,526 25 0.21%
Other** 40,346 578 5.75% 43,123 581 5.46%
Total interest earning assets 5,756,466 $ 67,089 4.67% 5,774,135 $ 68,811 4.83%
Non-interest earning assets 763,185     779,933    
Total Assets $ 6,519,651     $ 6,554,068    
Interest bearing liabilities            
Time $ 1,358,478 $ 2,878 0.85% $ 1,413,731 $ 2,970 0.85%
Money market 931,867 523 0.23% 948,738 526 0.22%
NOW 1,330,856 556 0.17% 1,313,700 538 0.17%
Savings 531,414 286 0.22% 532,823 282 0.21%
Total interest bearing deposits 4,152,615 4,243 0.41% 4,208,992 4,316 0.42%
Short-term borrowings and FHLB Advances 98,002 50 0.20% 103,851 70 0.27%
Long-term borrowings 135,831 1,719 5.08% 135,317 1,704 5.11%
Total interest bearing liabilities 4,386,448 $ 6,012 0.55% 4,448,160 $ 6,090 0.56%
Non-interest bearing deposits 1,002,757     942,006    
Other Liabilities 45,281     48,964    
Shareholders' equity 1,085,165     1,114,938    
Total Liabilities and Shareholders' Equity $ 6,519,651     $ 6,554,068    
Net interest income
 and spread
  $ 61,077 4.12%   $ 62,721 4.28%
Net interest margin     4.26%     4.41%
             
* Presented on a fully tax equivalent basis
** Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stocks

  

CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended
June 30, 2014
Three Months Ended
June 30, 2013
  Average
Balances
 
Interest*
 
Yield*
Average
Balances
 
Interest*
 
Yield*
Interest earning assets            
Loans $ 4,593,337 $ 61,826 5.40% $ 4,604,224 $ 68,363 5.96%
Investments 1,060,611 4,648 1.76% 1,292,249 4,525 1.40%
Interest bearing deposits 62,172 37 0.24% 164,784 102 0.25%
Other** 40,346 578 5.75% 36,278 462 5.11%
Total interest earning assets 5,756,466 $ 67,089 4.67% 6,097,535 $ 73,452 4.83%
Non-interest earning assets 763,185     865,118    
Total Assets $ 6,519,651     $ 6,962,653    
Interest bearing liabilities            
Time $ 1,358,478 $ 2,878 0.85% $ 1,853,592 $ 4,598 0.99%
Money market 931,867 523 0.23% 1,055,635 575 0.22%
NOW 1,330,856 556 0.17% 1,263,133 499 0.16%
Savings 531,414 286 0.22% 506,997 255 0.20%
Total interest bearing deposits 4,152,615 4,243 0.41% 4,679,357 5,927 0.51%
Short-term borrowings and FHLB Advances 98,002 50 0.20% 38,794 15 0.16%
Long-term borrowings 135,831 1,719 5.08% 142,541 1,894 5.33%
Total interest bearing liabilities 4,386,448 $ 6,012 0.55% 4,860,692 $ 7,836 0.65%
Non-interest bearing deposits 1,002,757     903,637    
Other Liabilities 45,281     56,324    
Shareholders' equity 1,085,165     1,142,000    
Total Liabilities and Shareholders' Equity $ 6,519,651     $ 6,962,653    
Net interest income and spread   $ 61,077 4.12%   $ 65,616 4.19%
Net interest margin     4.26%     4.32%
 
* Presented on a fully tax equivalent basis
** Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stocks

 

 
CAPITAL BANK FINANCIAL CORP.
YEAR TO DATE AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
  Six Months Ended
June 30, 2014
Six Months Ended
June 30, 2013
  Average
Balances
 
Interest*
 
Yield*
Average
Balances
 
Interest*
 
Yield*
Interest earning assets            
Loans $ 4,567,937 $ 125,230 5.53% $ 4,638,263 $ 140,319 6.10%
Investments 1,100,698 9,449 1.73% 1,150,237 8,074 1.42%
Interest bearing deposits 54,890 63 0.23% 374,399 473 0.25%
Other** 41,727 1,159 5.60% 37,565 952 5.11%
Total earning assets 5,765,252 $ 135,901 4.75% 6,200,464 $ 149,818 4.87%
Non-earning assets 775,274     880,302    
Total Assets $ 6,540,526     $ 7,080,766    
Interest bearing liabilities            
Time $ 1,385,952 $ 5,850 0.85% $ 1,919,601 $ 9,633 1.01%
Money market 940,256 1,049 0.22% 1,084,577 1,204 0.22%
NOW 1,322,325 1,094 0.17% 1,269,488 1,054 0.17%
Savings 532,115 568 0.22% 505,365 513 0.20%
Total interest bearing deposits 4,180,648 8,561 0.41% 4,779,031 12,404 0.52%
Short-term borrowings and FHLB Advances 100,910 121 0.24% 41,009 29 0.14%
Long-term borrowings 135,575 3,423 5.09% 156,648 4,393 5.66%
Total interest bearing liabilities 4,417,133 $ 12,105 0.55% 4,976,688 $ 16,826 0.68%
Non-interest bearing deposits 972,549     896,277    
Other Liabilities 50,872     54,320    
Shareholders' equity 1,099,972     1,153,481    
Total Liabilities and shareholders' equity $ 6,540,526     $ 7,080,766    
Net interest income and spread   $ 123,796 4.20%   $ 132,992 4.19%
Net interest margin     4.33%     4.33%
             
* Presented on a fully tax equivalent basis
** Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stocks

 

CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES
(Dollars in thousands)
(Unaudited)
 
CORE NET INCOME Three Months Ended
  June 30, 2014 March 31, 2014 December 31, 2013
             
Net Income $ 12,425 $ 12,425 $ 11,414 $ 11,414 $ 12,206 $ 12,206
  Pre-Tax After-Tax Pre-Tax After-Tax Pre-Tax After-Tax
Adjustments            
Non-interest income            
Security gains* 28 17 (173) (106) (164) (100)
Non-interest expense            
Stock-based compensation expense* 529 324 523 320 940 575
Contingent value right expense 327 327 767 767 299 299
Severance - - 6 6 - -
Legal settlement - - 2 2 - -
Taxes            
Tax effect of adjustments* (216) N/A (136) N/A (301) N/A
Core Net Income $ 13,093 $ 13,093 $ 12,403 $ 12,403 $ 12,980 $ 12,980
             
Average Assets $ 6,520   $ 6,554   $ 6,598  
             
ROA** 0.76%   0.70%   0.74%  
             
Core ROA*** 0.80%   0.76%   0.79%  
             
* Tax effected at an income tax rate of 39%
** ROA: Annualized net income / average assets
*** Core ROA: Annualized core net income / average assets

 

CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES (Continuation)
(Dollars in thousands)
(Unaudited)
 
CORE EFFICIENCY RATIO Three Months Ended
  June 30,
2014
March 31,
2014
Dec. 31,
2013
Sept. 30,
2013
June 30,
2013
Net interest income $ 60,831 $ 62,453 $ 65,723 $ 65,386 $ 65,352
Reported non-interest income 11,887 11,369 13,271 15,280 13,506
Less: Securities gains (losses) (28) 174 164 (247) 205
Core non-interest income $ 11,915 $ 11,195 $ 13,107 $ 15,527 $ 13,301
Reported non-interest expense $ 51,273 $ 55,224 $ 56,251 $ 59,263 $ 59,382
Less: Stock-based compensation expense 531 533 942 1,147 1,366
Less: Contingent value right expense (income) 327 767 299 (776) 428
Less: Conversion and severance expenses (conversion and merger expenses and salaries and employees benefits) - - - - 140
Less: Gain on extinguishment of debt - - - (430) -
Core non-interest expense $ 50,415 $ 53,924 $ 55,010 $ 59,322 $ 57,448
Efficiency Ratio* 70.51% 74.81% 71.21% 73.47% 75.30%
Core Efficiency Ratio** 69.30% 73.22% 69.78% 73.43% 73.04%
 
 * Efficiency Ratio: Non-interest expense / (Non-interest income + Net interest income)
** Core Efficiency Ratio: Core non-interest expense / (Core non-interest income + Net interest income)

 

CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES (Continuation)
(Dollars in thousands, except per share data)
(Unaudited)
 
TANGIBLE BOOK VALUE Three Months Ended
  June 30,
2014
March 31,
2014
Dec. 31,
2013
Sept. 30,
2013
June 30,
2013
Total shareholders' equity $ 1,073,558 $ 1,103,756 $ 1,112,788 $ 1,107,825 $ 1,102,751
Less: goodwill, core deposits intangibles, net of taxes (147,290) (148,045) (146,258) (147,061) (147,865)
Tangible book value $ 926,268 $ 955,711 $ 966,530 $ 960,764 $ 954,886
 Common shares outstanding 49,150 51,129 52,098 52,419 53,019
Tangible book value per share*** $ 18.85 $ 18.69 $ 18.55 $ 18.33 $ 18.01
*** Tangible book value is equal to book value less goodwill and core deposit intangibles, net of related deferred tax liabilities.
TANGIBLE COMMON EQUITY RATIO Three Months Ended
  June 30,
2014
March 31,
2014
Dec. 31,
2013
Sept. 30,
2013
June 30,
2013
Total shareholders' equity $ 1,073,558 $ 1,103,756 $ 1,112,788 $ 1,107,825 $ 1,102,751
Less: goodwill, core deposits intangibles (155,398) (156,633) (155,351) (156,667) (157,983)
Tangible common equity $ 918,160 $ 947,123 $ 957,437 $ 951,158 $ 944,768
Total assets $ 6,624,006 $ 6,548,624 $ 6,617,561 $ 6,601,311 $ 6,807,236
Less: goodwill, core deposits intangibles (155,398) (156,633) (155,351) (156,667) (157,983)
Tangible assets $ 6,468,608 $ 6,391,991 $ 6,462,210 $ 6,444,644 $ 6,649,253
Tangible common equity ratio 14.19% 14.82% 14.82% 14.76% 14.21%
CONTACT: Kenneth A. Posner

         Chief of Strategic Planning and Investor Relations

         Phone: (212) 399-4020

         E-mail: Kposner@cbfcorp.com

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Source: Capital Bank Financial Corp.

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