Capital Bank Financial
Apr 21, 2017

Capital Bank Financial Corp. Reports First Quarter GAAP and Core EPS of $0.39 and $0.45

CHARLOTTE, N.C., April 21, 2017 (GLOBE NEWSWIRE) -- Capital Bank Financial Corp. (Nasdaq:CBF) (the "Company") today reported first quarter net income of $20.9 million, which increased 112% year over year. GAAP net income per diluted share was $0.39. Core net income increased to $23.9 million, up 42% year over year. Core net income per diluted share was $0.45. Core pre-tax adjustments for the first quarter of 2017 included $4.9 million of acquisition and branch closure expenses, offset by $0.1 million gain on investment securities.

"With the CommunityOne conversion now behind us, we are totally focused on high-quality loan and core deposit growth. Thanks to the consistent focus and efforts of Capital Bank's teammates, we're optimistic about the outlook," said Gene Taylor, Chairman and Chief Executive Officer of Capital Bank Financial Corp.

"In addition to successfully completing the CommunityOne systems conversion, we've put in place new plans to rationalize excess facilities, which will help us achieve our stated profitability and return targets," added Chris Marshall, Chief Financial Officer of Capital Bank Financial Corp.

Loan Portfolio and Composition

During the first quarter, the loan portfolio increased by $105.8 million to $7.5 billion. New loans of $504.8 million were offset by payoffs totaling $379.6 million and special asset resolutions of $19.4 million.

The relative composition of the Company's loan portfolio at the end of the first quarter of 2017 and fourth and first quarters of 2016 was as follows:

  Mar 31,
 2017
   Dec 31,
 2016
  Mar 31,
 2016
Commercial real estate                             24%  23%  22%
C&I 37%  38%  44%
Consumer 36%  36%  32%
Other 3%  3%  2%
Total 100%  100%  100%

Deposits Composition and Cost of Funds

During the first quarter, total deposits increased by $212.0 million to $8.1 billion. The sequential increase was primarily due to a $90.1 million increase of non-interest checking balances and an increase of $95.6 million in money market balances. The cost of total deposits remained flat at 0.39%, while the cost of core deposits increased two basis points to 0.21%. Core deposits include all checking, savings and money market accounts, excluding brokered, and represent 73% of total deposits.

Net Interest Income and Net Interest Margin

Net interest income increased $4.3 million to $82.1 million from $77.8 million for the fourth quarter of 2016 and increased $20.7 million from $61.4 million for the first quarter of 2016. The net interest margin for the first quarter of 2017 was 3.73%, an increase of six basis points sequentially and nine basis points year over year. The sequential and year over year net interest margin increase was mainly due to a legacy loan recovery, which occurred during the first quarter of 2017.

Non-Interest Income

Non-interest income declined $1.2 million to $15.9 million from $17.0 million for the fourth quarter of 2016 and increased $13.3 million from $2.6 million for the first quarter of 2016. The sequential decrease was mainly driven by $1.8 million lower investment securities gains. The year over year increase was mainly due to the absence of a $9.2 million charge for the termination of loss share agreements in the prior year and an increase associated with the acquisition of CommunityOne.

Provision for Loan and Lease Losses and Credit Quality

The provision of $3.4 million recorded for the first quarter of 2017 included a $3.2 million provision for new and acquired non-impaired loans and a $186 thousand provision on acquired impaired loans. Net charge-offs for the first quarter of 2017 were $2.6 million, $0.3 million lower than the fourth quarter of 2016.

At March 31, 2017, the allowance for loan and lease losses was $43.9 million, of which $23.2 million related to acquired impaired loans and $20.7 million related to new and acquired non-impaired loans. The allowance for loan and lease losses represents 0.58% of the Company's total $7.5 billion loan portfolio.

At March 31, 2017, non-performing loans were $71.6 million, a decrease of 4.7% from December 31, 2016, mainly as a result of resolutions and upgrades. Non-performing loans increased 10.8% from March 31, 2016, due primarily to the acquisition of CommunityOne.

Non-Interest Expense

Non-interest expense declined $11.3 million to $62.7 million from $74.0 million for the fourth quarter of 2016 and increased $15.8 million from $46.9 million for the first quarter of 2016. The sequential decrease was mainly due to a decrease of $15.5 million in conversion and merger expense and the absence of $1.4 million legal settlement expenses. Partially offsetting the decrease was a $3.0 million increase in salaries expense and benefit expense and $1.9 million in restructuring charges. The year over year increase was mainly due to an increase of $7.0 million in salaries and benefit expense, $1.8 million in restructuring charges, $1.4 million in conversion and merger expense and $1.3 million in occupancy expense, mostly related to the acquisition of CommunityOne.

Income Tax Expense

Income tax expense was $11.0 million for the first quarter of 2017, an effective rate of 34%, compared to $6.4 million and 34% for the fourth quarter of 2016. Income tax expense was $5.8 million and an effective tax rate of 37% for the first quarter of 2016. The year-over-year decrease in effective income tax rate is due to lower state income taxes, higher tax exempt interest income and other favorable adjustments.

Financial Position

Total assets increased by $167.4 million to $10.1 billion as of March 31, 2017, from $9.9 billion as of December 31, 2016. During the quarter, the Company's loan portfolio increased $105.8 million to $7.5 billion. Total deposits increased by $212.0 million to $8.1 billion, and core deposits increased by $214.6 million, or a 15% annualized rate. FHLB borrowings decreased $55.1 million. Book value per share was $25.17 as of March 31, 2017, an increase of $0.21 and $2.09 over December 31, 2016 and March 31, 2016, respectively. Tangible book value per share was $20.29 as of March 31, 2017, an increase of $0.28 and $0.52 over December 31, 2016 and March 31, 2016, respectively. During the first quarter, the Company did not repurchase shares of common stock. The Company has $88 million remaining under the current board authorized stock repurchase program.

The Company declared a cash dividend of $0.12 per share, payable on May 19, 2017, to shareholders of record as of May 5, 2017.

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 (913) 312-0654, and the confirmation pass code is 7115841. Please dial in 10 minutes prior to the beginning of the call. A telephonic replay of the conference call will be available through April 28, 2017, by dialing (719) 457-0820 and entering pass code 7115841. 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 core net income, the core efficiency ratio and core ROA are useful for both investors and management to understand the effects of certain non-interest items and provide an alternative view of the Company's performance over time and in comparison to the Company's competitors. These measures should not 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 the most directly comparable GAAP measure.

The Company uses these non-GAAP measures for various purposes, including measuring performance for incentive compensation and as a basis for strategic planning and forecasting.

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 analysis 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 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 Corporation, a State of North Carolina chartered financial institution with $10.1 billion in total assets as of March 31, 2017, and 193 full-service banking offices throughout Florida, North and South Carolina, Tennessee and Virginia. To learn more about Capital Bank Financial Corp, please visit www.capitalbank-us.com

 
CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share data)
(Unaudited)
 
 Three Months Ended
 Mar 31,
 2017
 Dec 31,
 2016
 Sep 30,
 2016
 Jun 30,
 2016
 Mar 31,
 2016
Interest and dividend income$92,937  $87,746  $70,929  $69,579  $69,472 
Interest expense10,821  9,927  8,302  8,064  8,105 
Net Interest Income82,116  77,819  62,627  61,515  61,367 
Provision for loan and lease losses3,392  1,980  586  1,172  1,375 
Net interest income after provision for loan and lease losses        78,724  75,839  62,041   60,343  59,992 
Non-Interest Income         
Service charges on deposit accounts5,375  5,949  4,777  4,486  4,811 
Debit card income4,765  4,211  3,389  3,235  3,086 
Fees on mortgage loans originated and sold1,248  1,402  1,334  1,140  971 
Investment advisory and trust fees641  591  290  455  497 
Termination of loss share agreements        (9,178)
Investment securities gains (losses), net67  1,894  71  117  40 
Other income3,756  2,969  2,509  2,489  2,339 
Total non-interest income15,852  17,016  12,370  11,922  2,566 
Non-Interest Expense         
Salaries and employee benefits29,166  26,134  20,935  20,139  22,162 
Stock-based compensation expense900  531  790  467  317 
Net occupancy and equipment expense8,992  8,374  7,340  7,355  7,703 
Computer services3,873  4,364  3,153  3,274  3,575 
Software expense2,662  2,391  1,948  2,000  2,036 
Telecommunication expense2,424  2,147  1,790  1,558  1,532 
OREO valuation expense247  677  742  1,119  467 
Net gains on sales of OREO(308) (150) (159) (413) (679)
Foreclosed asset related expense364  513  397  399  285 
Loan workout expense201  327  206  71  244 
Conversion and merger related expense3,037  18,525  394  1,236  1,687 
Professional fees2,096  1,761   1,642  1,353  1,612 
Restructuring charges, net1,912  4  (113) 5  142 
Legal settlement expense  1,361  1,500     
Regulatory assessments719  1,092  841  1,259  1,275 
Other expense6,418   5,943  6,124  4,714  4,580 
Total non-interest expense62,703  73,994  47,530  44,536  46,938 
Income before income taxes31,873  18,861  26,881  27,729  15,620 
Income tax expense10,990  6,427  8,393  10,327  5,780 
Net income$20,883  $12,434  $18,488  $17,402  $9,840 
          
Earnings per share:         
Basic$0.40  $0.25  $0.43  $0.40  $0.23 
Diluted$0.39  $0.24  $0.42  $0.40  $0.22 
          
Weighted average shares outstanding:         
Basic51,634  49,334  43,028   43,011  43,063 
Diluted53,127  50,387  43,909  43,879   43,904 


 
CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)
(Unaudited)
 
 Mar 31,
 2017
 Dec 31,
 2016
 Mar 31,
 2016
Assets     
Cash and due from banks$100,134  $107,707  $88,802 
Interest-bearing deposits in other banks60,413  201,348  93,218 
Total cash and cash equivalents 160,547  309,055  182,020 
Trading securities4,150  3,791  3,418 
Investment securities available-for-sale at fair value (amortized cost $1,168,995 $927,266 and $657,631, respectively)1,154,496  912,250  663,925 
Investment securities held-to-maturity at amortized cost (fair value $445,696 $460,911 and $467,372, respectively)446,020  463,959  460,483 
Loans held for sale4,980  12,874  8,070 
Loans, net of deferred loan costs and fees7,506,975  7,393,318   5,626,887 
Less: Allowance for loan and lease losses43,891  43,065   45,263 
Loans, net7,463,084  7,350,253  5,581,624 
Other real estate owned 51,050  53,482  48,505 
Premises and equipment, net199,167  205,425   157,131 
Goodwill234,158  235,500  134,522 
Intangible assets, net31,553  33,370  14,166 
Deferred income tax asset, net146,724  150,272  95,363 
Bank owned life insurance100,251  99,703  56,425 
Other assets101,862  100,723  74,146 
Total Assets$10,098,042  $9,930,657  $7,479,798 
Liabilities and Shareholders' Equity     
Liabilities     
Deposits:      
Non-interest bearing demand$1,680,243  $1,590,164  $1,190,831 
Interest bearing demand1,960,187  1,930,143  1,402,342 
Money market1,821,474  1,725,838  1,262,581 
Savings496,230  497,171  420,073 
Time deposits2,134,473  2,137,312  1,663,906 
Total deposits8,092,607  7,880,628  5,939,733 
Federal Home Loan Bank advances490,650  545,701  400,849 
Short-term borrowings21,125  19,157  16,200 
Long-term borrowings117,272  116,456  86,328 
Accrued expenses and other liabilities68,457  76,668  39,695 
Total liabilities$8,790,111  $ 8,638,610  $6,482,805 
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, 46,479 issued and 35,213 outstanding, 46,178 issued 34,911 outstanding and 37,207 issued and 26,636 outstanding, respectively.465  462  372 
Common stock-Class B $0.01 par value: 200,000 shares authorized, 18,527 issued and 16,753 outstanding, 18,627 issued and 16,854 outstanding and 18,327 issued and 16,554 outstanding, respectively.185  186  183 
Additional paid in capital1,369,689  1,368,459  1,076,931 
Retained earnings262,443  247,758  214,268 
Accumulated other comprehensive (loss) gain(12,467) (12,434) 3,878 
Treasury stock, at cost, 13,040, 13,040 and 12,345 shares, respectively(312,384) (312,384) (298,639)
Total shareholders' equity1,307,931  1,292,047  996,993 
Total Liabilities and Shareholders' Equity$10,098,042  $9,930,657  $7,479,798 


 
CAPITAL BANK FINANCIAL CORP.
KEY METRICS
(Dollars in thousands)
(Unaudited)
 
 Three Months Ended
 Mar 31,
 2017
 Dec 31,
 2016
 Sep 30,
 2016
 Jun 30,
 2016
 Mar 31,
 2016
Performance Ratios         
Interest rate spread3.58% 3.53% 3.43% 3.48% 3.50%
Net interest margin3.73% 3.67% 3.58% 3.62% 3.64%
Return on average assets0.84% 0.53% 0.97% 0.93% 0.53%
Return on average shareholders' equity6.43% 4.05% 7.24% 6.87% 3.96%
Efficiency ratio64.00% 78.02% 63.38% 60.65% 73.42%
Average interest-earning assets to average interest-bearing liabilities129.53% 130.22% 131.43% 131.21% 129.54%
Average loans receivable to average deposits93.41% 94.57% 98.46% 96.56% 95.66%
Yield on interest-earning assets4.21 % 4.13% 4.05% 4.09% 4.11%
Cost of interest-bearing liabilities0.63% 0.61% 0.62% 0.62% 0.62%
Asset and Credit Quality Ratios-Total Loans         
Non-accrual loans$13,608  $11,449  $11,873  $9,016  $8,526 
Acquired impaired loans > 90 days past due and still accruing$57,969  $63,668  $48,477  $56,108  $56,041 
Nonperforming loans to loans receivable0.95% 1.01% 1.02% 1.13% 1.15%
Nonperforming assets to total assets1.22% 1.30% 1.37% 1.44% 1.51%
ALLL to nonperforming assets35.73% 33.45% 41.29% 40.98% 39.97%
ALLL to total gross loans0.58% 0.58% 0.75% 0.78% 0.80%
Annualized net charge-offs/average loans0.14% 0.17% 0.10%  0.11% 0.08%
Asset and Credit Quality Ratios-Non Acquired Loans          
Nonperforming non acquired loans to total non acquired loans receivable    0.21% 0.18% 0.19% 0.12% 0.11%
Non acquired loans ALLL to total gross non acquired loans receivable0.40% 0.41% 0.43% 0.46% 0.47%
Asset and Credit Quality Ratios-Acquired Loans         
Nonperforming acquired loans to total acquired loans receivable2.55% 2.66% 4.65% 5.08% 4.67%
Acquired loans ALLL to total gross acquired loans0.98% 0.93% 2.15% 2.04% 1.93%
Capital Ratios (Company) (1)         
Total average shareholders' equity to total average assets13.11% 13.15% 13.46% 13.55% 13.35%
Tangible common equity ratio (2)10.60% 10.59%  11.55% 11.62% 11.57%
Tier 1 leverage capital ratio11.63% 12.22% 12.89% 12.64% 12.49%
Tier 1 common capital ratio12.18% 12.40% 13.27% 13.38% 13.38%
Tier 1 risk-based capital ratio13.43% 13.49% 14.44% 14.57% 14.58%
Total risk-based capital ratio13.96% 14.02% 15.12% 15.29 % 15.32%
Capital Ratios (Bank) (1)         
Tangible common equity ratio (2)11.03% 11.07% 10.74% 10.71% 11.45%
Tier 1 leverage capital ratio10.67% 11.23% 10.53% 10.42% 11.10%
Tier 1 common capital ratio12.32% 12.39% 11.98% 11.97% 12.95%
Tier 1 risk-based capital ratio12.32% 12.39% 11.98% 11.97% 12.95%
Total risk-based capital ratio12.86% 12.93% 12.70% 12.72% 13.72%

(1) Capital Ratios are preliminary
(2) See "Reconciliation of Non-GAAP Measures"

 
CAPITAL BANK FINANCIAL CORP.
LOANS AND DEPOSITS
(Dollars in thousands)
(Unaudited)
 
 Mar 31,
 2017
 Dec 31,
 2016
 Sep 30,
 2016
 Jun 30,
 2016
 Mar 31,
 2016
Loans         
Non-owner occupied commercial real estate            $ 1,187,344  $1,130,883  $920,521  $891,830  $850,766 
Other commercial construction and land350,401  327,622  222,794  212,315   194,971 
Multifamily commercial real estate115,996  117,515  76,296   74,328  75,737 
1-4 family residential construction and land157,920  140,030  111,954  100,306  96,703 
Total commercial real estate1,811,661  1,716,050  1,331,565  1,278,779   1,218,177 
Owner occupied commercial real estate1,313,086  1,321,405  1,072,586  1,075,306  1,095,460 
Commercial and industrial1,443,828  1,468,874  1,458,523   1,448,698  1,375,233 
Lease financing    525  877  1,088 
Total commercial2,756,914  2,790,279  2,531,634  2,524,881  2,471,781 
1-4 family residential1,787,097  1,714,702  1,168,468  1,039,309  1,015,071 
Home equity loans502,099  507,759  364,117  364,169  368,510 
Indirect auto loans199,951  226,717  254,736  285,618  317,863 
Other consumer loans222,824  222,255  94,277  85,964  84,108 
Total consumer2,711,971  2,671,433  1,881,598  1,775,060  1,785,552 
Other231,409  228,430  191,136  166,185  159,447 
Total loans$7,511,955  $7,406,192  $5,935,933  $5,744,905   $5,634,957 
          
Deposits         
Non-interest bearing demand$1,680,243  $1,590,164  $1,207,800  $1,172,481  $1,190,831 
Interest bearing demand1,960,187  1,930,143  1,463,520  1,456,558  1,402,342 
Money market1,746,444  1,651,023  1,166,918  1,105,460   1,162,546 
Savings496,230  497,171  401,205  403,106  420,073 
Total core deposits5,883,104  5,668,501  4,239,443  4,137,605  4,175,792 
Wholesale money market75,030  74,815  125,030  50,015  100,035 
Time deposits2,134,473  2,137,312  1,668,784   1,619,507  1,663,906 
Total deposits$8,092,607  $7,880,628  $6,033,257  $5,807,127  $5,939,733 


 
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended
March 31, 2017
  Three Months Ended
December 31, 2016
  Average
Balances
 Interest Yield /
Rate
 Average
Balances
 Interest Yield /
Rate
Interest earning assets             
Loans (1) $7,409,284  $83,753  4.58% $6,977,690  $79,690  4.54%
Investment securities (1) 1,501,816  9,312  2.51% 1,347,554  8,065  2.38%
Interest bearing deposits in other banks     58,269  97  0.68% 143,446  166  0.46%
Other earning assets (2) 29,053  357  4.98% 30,904  382  4.92%
Total interest earning assets 8,998,422  $93,519   4.21% 8,499,594  $88,303  4.13%
Non-interest earning assets 909,138      829,740     
Total assets $9,907,560      $9,329,334     
Interest bearing liabilities            
Time deposits $2,141,806  $4,539  0.86% $2,049,066  $4,526  0.88%
Money market 1,777,343  1,756  0.40% 1,601,167  1,498  0.37%
Interest bearing demand 1,922,687  1,138  0.24%  1,748,269  935  0.21%
Savings 494,538  220  0.18% 471,466  219  0.18%
Total interest bearing deposits 6,336,374  7,653  0.49% 5,869,968  7,178  0.49%
Short-term borrowings and FHLB advances 493,643  887  0.73% 548,667  662  0.48%
Long-term borrowings 116,744  2,281  7.92% 108,276  2,087  7.67%
Total interest bearing liabilities 6,946,761  10,821  0.63% 6,526,911  9,927  0.61%
Non-interest bearing demand 1,595,695      1,508,496     
Other liabilities 65,753      66,710     
Shareholders' equity 1,299,351      1,227,217     
Total liabilities and shareholders' equity  $9,907,560      $9,329,334     
Net interest income and spread   $82,698  3.58%    $78,376  3.53%
Net interest margin     3.73%     3.67%

(1) Presented on a fully tax equivalent basis
(2) Includes Federal Home Loan Bank stocks

 
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended
March 31, 2017
 Three Months Ended
March 31, 2016
  Average
Balances
 Interest Yield /
Rate
 Average
Balances
 Interest Yield /
Rate
Interest earning assets             
Loans (1) $7,409,284  $83,753  4.58% $ 5,611,488  $63,009  4.52%
Investment securities (1) 1,501,816  9,312  2.51% 1,122,523  6,483  2.32%
Interest bearing deposits in other banks           58,269  97  0.68% 73,188  84  0.46%
Other earning assets (2) 29,053  357  4.98% 25,136  315  5.04%
Total interest earning assets 8,998,422  $93,519  4.21% 6,832,335  $69,891  4.11%
Non-interest earning assets 909,138      618,087     
Total assets $9,907,560       $7,450,422     
Interest bearing liabilities            
Time deposits $2,141,806  $4,539  0.86% $1,689,653  $4,120  0.98%
Money market 1,777,343  1,756  0.40% 1,247,333  1,067  0.34%
Interest bearing demand 1,922,687  1,138  0.24% 1,370,957  648  0.19%
Savings 494,538  220  0.18% 419,588  227  0.22%
Total interest bearing deposits 6,336,374  7,653  0.49% 4,727,531  6,062  0.52%
Short-term borrowings and FHLB advances 493,643  887  0.73% 460,892  532  0.46%
Long-term borrowings 116,744  2,281  7.92% 85,986  1,511  7.07%
Total interest bearing liabilities 6,946,761  10,821  0.63% 5,274,409  8,105  0.62%
Non-interest bearing demand 1,595,695      1,138,782     
Other liabilities 65,753      42,418     
Shareholders' equity 1,299,351      994,813     
Total liabilities and shareholders' equity $9,907,560      $7,450,422     
Net interest income and spread   $82,698  3.58%   $61,786  3.50%
Net interest margin     3.73%     3.64%

(1) Presented on a fully tax equivalent basis
(2) Includes Federal Home Loan Bank stocks

 
CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES
(Dollars in thousands)
(Unaudited)
 
CORE NET INCOME Three Months Ended
  Mar 31, 2017 Dec 31, 2016 Mar 30, 2016
Net Income $20,883  $20,883  $12,434  $12,434  $9,840  $9,840 
  Pre-Tax After-Tax Pre-Tax After-Tax Pre-Tax After-Tax
Adjustments            
Non-interest income            
Indemnification asset termination         9,178  5,670 
Security (gains) losses* (67) (41) (1,894) (1,170) (40) (25)
Non-interest expense            
Legal Settlement     1,361  841     
Tax Adjustment     (1,350) (1,350)    
Severance expense*     7  4  75  46 
Restructuring expense* 1,912  1,181  4  3  142  88 
Conversion costs and merger tax deductible*         3,037  1,877   18,245  11,270  1,107  684 
Legal merger non deductible     280  280  580  580 
Tax effect of adjustments* (1,865)  N/A  (6,775)   N/A  (3,999)  N/A 
Core Net Income $23,900  $23,900  $22,312  $22,312  $16,883  $16,883 
             
Diluted shares 53,127    50,387    43,904   
Core Net Income per share $0.45    $ 0.44    $0.38   
Average Assets 9,907,560    9,329,334    7,450,422   
             
ROA** 0.84%   0.53%   0.53%  
Core ROA*** 0.96%   0.96%   0.91%  

    * Tax effected at an income tax rate of 38%
  ** 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 RATIOThree Months Ended
 Mar 31,
 2017
 Dec 31,
 2016
  Sep 30,
 2016
 Jun 30,
 2016
 Mar 31,
 2016
Net interest income$82,116  $77,819  $62,627  $61,515  $61,367 
          
Reported non-interest income15,852  17,016  12,370  11,922  2,566 
Indemnification asset termination        (9,178)
Less: Securities gains (losses)67  1,894  71  117  40 
Core non-interest income$15,785  $15,122  $12,299  $11,805  $11,704 
          
Reported non-interest expense$62,703  $73,994  $47,530  $44,536  $46,938 
Less: Severance expense  7      75 
Conversion costs and merger tax deductible3,037  18,245  331  881  1,107 
Legal settlement  1,361  1,500     
Legal merger non deductible  280  61   355  580 
Restructuring expense1,912  4  (113 ) 5  142 
Contract termination         
Conversion and severance expenses (conversion and merger expenses and salaries and employees benefits)             
Core non-interest expense$57,754  $54,097  $45,751  $43,295  $45,034  
          
Efficiency ratio*64.00% 78.02% 63.38% 60.65% 73.42%
Core efficiency ratio**58.99% 58.21% 61.06% 59.05% 61.63%

   *  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 and shares in thousands, except per share data)
(Unaudited)
 
TANGIBLE BOOK VALUE Three Months Ended
  Mar 31,
 2017
 Dec 31,
 2016
 Sep 30,
 2016
 Jun 30,
 2016
 Mar 31,
 2016
Total shareholders' equity $1,307,931  $1,292,047  $1,029,841  $1,016,498  $996,993 
Less: goodwill and intangible assets, net of taxes     (253,708) (256,176) (142,141) (142,725) (143,304)
Tangible book value* $1,054,223  $1,035,871  $887,700  $873,773  $853,689 
Common shares outstanding 51,966  51,765  43,235  43,219  43,189 
Tangible book value per share $20.29  $20.01  $20.53   $20.22  $19.77 

* 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
  Mar 31,
 2017
 Dec 31,
 2016
 Sep 30,
 2016
 Jun 30,
 2016
 Mar 31,
 2016
Total shareholders' equity $1,307,931  $1,292,047  $1,029,841  $1,016,498  $996,993 
Less: goodwill and intangible assets (265,711) (268,870) (146,810) (147,753) (148,688)
Tangible common equity $ 1,042,220  $1,023,177  $883,031  $868,745  $848,305 
Total assets $10,098,042   $9,930,657  $7,792,458  $7,621,225  $7,479,798 
Less: goodwill and intangible assets (265,711) (268,870) (146,810) (147,753) (148,688)
Tangible assets $9,832,331  $9,661,787  $7,645,648  $7,473,472  $7,331,110 
Tangible common equity ratio 10.60% 10.59% 11.55% 11.62% 11.57%
                 

 

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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