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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Capital Bank Corp. (MM) | NASDAQ:CBKN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.45 | 0 | 01:00:00 |
North Carolina
|
000-30062
|
56-2101930
|
||
(State or other jurisdiction of incorporation
or organization) |
(Commission
File Number)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
o
|
Accelerated filer
o
|
||
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
þ
|
DOCUMENTS INCORPORATED BY REFERENCE
|
|||
Document Incorporated
|
Where
|
||
1.
|
Portions of the registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 23, 2012
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Part III
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PART I
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Page No.
|
||
Item 1.
|
4
|
||
Item 1A.
|
26
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||
Item 1B.
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Unresolved Staff Comments
|
47
|
|
Item 2.
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Properties
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48
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|
Item 3.
|
Legal Proceedings
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48
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|
Item 4.
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Mine Safety Disclosures
|
48
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PART II
|
|||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 48 | |
Item 6.
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50
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||
Item 7.
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52
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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77
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Item 8.
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78
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||
Consolidated
Balance Sheets as of December 31, 2011 (Successor) and December 31, 2010 (Predecessor)
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78
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||
Consolidated Statements of
Operations for the Period of January 29, 2011 to December 31, 2011 (Successor), the Period of January 1, 2011 to January 28, 2011 (Predecessor), and the Years Ended December 31, 2010 and 2009 (Predecessor)
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79
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||
Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive
Income for the Period of January 29, 2011 to December 31, 2011 (Successor), the Period of January 1, 2011 to January 28, 2011 (Predecessor), and the Years Ended December 31, 2010 and 2009 (Predecessor)
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80
|
||
Consolidated Statements of Cash
Flows for the Period of January 29, 2011 to December 31, 2011 (Successor), the Period of January 1, 2011 to January 28, 2011 (Predecessor), and the Years Ended December 31, 2010 and 2009 (Predecessor)
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82
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||
84
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|||
126
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|||
Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
130
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Item 9A.
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130
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||
Item 9A(T).
|
Controls and Procedures
|
131
|
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Item 9B.
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Other Information
|
131
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PART III
|
|||
Item 10.
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Directors, Executive Officers and Corporate Governance
|
131
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Item 11.
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Executive Compensation
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131
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters
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131
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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131
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Item 14.
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Principal Accounting Fees and Services
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131
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PART IV
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|||
Item 15.
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Exhibits and Financial Statement Schedules
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132
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|
Signatures
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Capital Bank, NA
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Efficiency Ratio
|
||||||||
December 31, 2011
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Non-adjusted
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Adjusted
|
|||||||
(Dollars in thousands)
|
|||||||||
Noninterest expense
|
$
|
163,710
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$
|
163,710
|
|||||
Less: conversion expense
|
–
|
(7,620
|
)
|
||||||
Noninterest expense, adjusted
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163,710
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156,090
|
|||||||
Net interest income
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193,598
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193,598
|
|||||||
Noninterest income
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40,660
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40,660
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|||||||
Net revenue
|
$
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234,258
|
$
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234,258
|
|||||
Efficiency ratio
|
69.9
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%
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66.6
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%
|
•
|
Experienced and Respected Management Team with a Successful Track Record
.
Members of our executive management team and Board of Directors have served in executive leadership roles at Fortune 500 financial services companies, including Bank of America, Fifth Third Bancorp and Morgan Stanley. The executive management team has extensive experience overseeing commercial and consumer banking, mergers and acquisitions, systems integrations, technology, operations, credit and regulatory compliance. Many members of our executive management team are from the southeastern region of the United States and have an extensive network of contacts with banking executives, existing and potential customers, and business and civic leaders throughout the region. We believe our executive management team’s reputation and track record give us an advantage in negotiating acquisitions and hiring and retaining experienced bankers.
|
•
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Growth-Oriented Business Model.
Our executive management team seeks to foster a strong sales culture with a focus on developing key client relationships, including direct participation in sales calls, and through regular reporting and accountability while emphasizing risk management. Our executive management and line of business executives monitor performance on a quarterly, monthly, weekly, and in some cases, daily basis, and our compensation plans reward core deposit and responsible commercial loan growth, subject to credit quality, compliance and profitability standards. We have an integrated, scalable core processing platform and centralized credit, finance and technology operations that we believe will support future growth. Our business model contributed to the Bank’s $728.4 million of commercial and consumer loan originations and $265.4 million in total deposit growth for 2011, excluding the initial increase in deposits resulting from CBF’s acquisitions of Capital Bank Corporation and Green Bankshares.
|
|
•
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Highly Skilled and Disciplined Acquirer
.
CBF has executed six acquisitions in just 14 months. CBF integrated its first four investments into a common core processing platform within six months, the fifth in July 2011 and the sixth in February 2012. We believe our track record of completing and integrating transactions quickly has helped us negotiate transactions on more economically favorable terms. CBF has conducted due diligence on more than 82 financial institutions, many of which its diligence process indicated would not meet its strategic objectives.
|
|
•
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Reduced-Risk Legacy Portfolio
.
Our acquired loan portfolios have been marked-to-market with the application of the acquisition method of accounting, meaning that the carrying value of these assets at the time of their acquisitions reflected our estimate of lifetime credit losses. In addition, as of December 31, 2011, approximately 13% of our loan portfolio was covered by the loss sharing agreements we entered into with the FDIC, resulting in limited credit risk exposure for these assets.
|
|
•
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Excess Capital and Liquidity
.
As a result of its private placements and the disciplined deployment of capital, we have ample capital with which to make acquisitions. As of December 31, 2011, CBF had a 13.2% tangible common equity ratio
1
(which is a non-GAAP measure used by certain regulators, financial analysts and others to measure core capital strength) and a 12.5% Tier 1 leverage ratio, which provides CBF with $161.7 million in excess capital relative to the 10% Tier 1 leverage standard required under Capital Bank, NA’s operating agreement with the OCC. As of December 31, 2011, Capital Bank, NA had a 10.4% Tier 1 leverage ratio, a 15.7% Tier 1 risk-based ratio and a 16.7% total risk-based capital ratio. As of December 31, 2011, the Capital Bank had cash and securities equal to 21.6% of total assets, representing $426.9 million of liquidity in excess of our target of 15%, which provides ample liquidity to support our existing banking franchises. Further, our investment portfolio consists primarily of U.S. agency-guaranteed mortgage-backed securities, which have limited credit or liquidity risk. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Resources and Liquidity Management” for a discussion of the use of the tangible common equity ratio in our business and the reconciliation of tangible common equity ratio.
|
|
•
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Scalable Back-Office Systems
.
All of CBF’s acquired institutions operate on a single information processing system. Green Bankshares separately uses the same operating platform, which we have begun to integrate onto our common information processing system. Our systems are designed to accommodate all of our projected future growth and allow us to offer our customers virtually all of the services currently offered by the nation’s largest financial institutions, including state-of-the-art online banking. Enhancements made to our systems are included to improve our commercial and consumer loan origination, electronic banking and direct response marketing processes, as well as enhance cash management, streamlined reporting, reconciliation support and sales support.
|
1
|
The tangible common equity ratio is a non-GAAP measure calculated as tangible common equity divided by tangible assets. Tangible common equity is calculated as total shareholders’ equity less preferred stock and less goodwill and other intangible assets, net and tangible assets are calculated as total assets less goodwill and other intangible assets, net.
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•
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owner occupied commercial real estate construction and term loans;
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|
•
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working capital loans and lines of credit;
|
|
•
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demand, term and time loans; and
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•
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equipment, inventory and accounts receivable financing.
|
•
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home equity lines of credit;
|
|
•
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residential first lien mortgages;
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•
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second lien mortgages;
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•
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new and used auto loans;
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•
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new and used boat loans;
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•
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overdraft protection; and
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|
•
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unsecured personal credit lines.
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•
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capitalize on our personal relationship approach, which we believe differentiates us from our larger competitors in both the commercial and residential mortgage lending businesses;
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|
•
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meet our growth objectives based on current economic and market conditions;
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•
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attract core deposits held in checking, savings, money market and certificate of deposit accounts;
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•
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provide customers with access to our local executives;
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•
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appeal to customers in our region who value quality banking products and personal service;
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•
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pursue commercial and industrial lending opportunities with small to mid-sized businesses that are underserved by our larger competitors;
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•
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cross-sell our products and services to our existing customers to leverage our relationships, grow fee income and enhance profitability;
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|
•
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utilize existing industry relationships cultivated by our senior management team; and
|
|
•
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adhere to safe and sound credit standards.
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•
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Minimum Common Equity.
The minimum requirement for common equity, the highest form of loss absorbing capital, would be raised from the current 2.0% level, before the application of regulatory adjustments, to 3.5% as of January 11, 2013 and 4.5% by January 1, 2015 after the application of stricter adjustments. The “capital conversion buffer,” discussed below, would cause required total common equity to rise to 7.0% by January 1, 2019 (4.5% attributable to the minimum required common equity plus 2.5% attributable to the “capital conservation buffer”).
|
|
•
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Minimum Tier 1 Capital.
The minimum Tier 1 capital requirement, which includes common equity and other qualifying financial instruments based on stricter criteria, would increase from 4.0% to 4.5% by January 1, 2013, and 6.0% by January 1, 2015. Total Tier 1 capital would rise to 8.5% by January 1, 2019 (6.0% attributable to the minimum required Tier 1 capital ratio plus 2.5% attributable to the capital conservation buffer, as discussed below).
|
|
•
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Minimum Total Capital.
The minimum Total Capital (Tier 1 and Tier 2 capital) requirement would increase to 8.0% (10.5% by January 1, 2019, including the capital conservation buffer).
|
|
•
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Capital Conservation Buffer.
The capital conservation buffer would add 2.5% to the regulatory minimum common equity requirement (adding 0.625% during each of the three years beginning in January 1, 2016 through January 1, 2019). The buffer would be added to common equity, after the application of deductions. The purpose of the conservation buffer is to ensure that banks maintain a buffer of capital that can be used to absorb losses during periods of financial and economic stress. It is expected that, while banks would be allowed to draw on the buffer during such periods of stress, the closer their regulatory capital ratios approach the minimum requirement, the greater the constraints that would be applied to earnings distributions.
|
•
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Countercyclical Buffer.
Basel III expects regulators to require, as appropriate to national circumstances, a “countercyclical buffer” within a range of 0% to 2.5% of common equity or other fully loss-absorbing capital. The purpose of the countercyclical buffer is to achieve the broader goal of protecting the banking sector from periods of excess aggregate credit growth. For any given country, it is expected that this buffer would only be applied when there is excess credit growth that is resulting in a perceived system-wide buildup of risk. The countercyclical buffer, when in effect, would be introduced as an extension of the capital conservation buffer range.
|
|
•
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Regulatory Deductions from Common Equity.
The regulatory adjustments (
i.e.
, deductions and prudential filters), including minority interests in financial institutions, mortgage-servicing rights, and deferred tax assets from timing differences, would be deducted in increasing percentages beginning January 1, 2014, and would be fully deducted from common equity by January 1, 2018. Certain instruments that no longer qualify as Tier 1 capital, such as trust preferred securities, also would be subject to phaseout over a 10-year period beginning January 1, 2013.
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|
•
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Non-Risk-Based Leverage Ratios.
These capital requirements are supplemented by a non-risk-based leverage ratio that will serve as a backstop to the risk-based measures described above. In July 2010, the Governors and Heads of Supervision agreed to test a minimum Tier 1 leverage ratio of 3.0% during the parallel run period. Based on the results of the parallel run period, any final adjustments would be carried out in the first half of 2017 with a view to adopting the 3.0% leverage ratio on January 1, 2018, based on appropriate review and calibration.
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•
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Source of Strength.
The Dodd-Frank Act requires all companies that directly or indirectly control a depository institution to serve as a source of strength for the institution.
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•
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Limitation on Federal Preemption.
The Dodd-Frank Act may limit the ability of national banks to rely upon federal preemption of state consumer financial laws. Under the Dodd-Frank Act, the OCC will have the ability to make preemption determinations only if certain conditions are met and on a case-by-case basis. The Dodd-Frank Act also eliminates the extension of preemption to operating subsidiaries of national banks. However, the Dodd-Frank Act preserves certain preemption standards articulated by the U.S. Supreme Court and existing interpretations thereunder, as well as express preemption provisions in other federal laws (such as the Equal Credit Opportunity Act and the Truth in Lending Act) that specifically address the application of state law in relation to that federal law. The Dodd-Frank Act authorizes state enforcement authorities to bring lawsuits under state law against national banks and authorizes suits by state attorney generals against national banks to enforce rules issued by the CFPB. With this broad grant of enforcement authority to states, institutions, including national banks, could be subject to varying and potentially conflicting interpretations of federal law by various state attorney generals, state regulators and the courts.
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•
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Mortgage Loan Origination and Risk Retention.
The Dodd-Frank Act imposes new standards for mortgage loan originations on all lenders, including banks, in an effort to require steps to verify a borrower’s ability to repay. The Dodd-Frank Act also generally requires lenders or securitizers to retain an economic interest in the credit risk relating to loans the lender sells or mortgages and other asset-backed securities that the securitizer issues. The risk retention requirement generally will be 5%, but could be increased or decreased by regulation.
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•
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Consumer Financial Protection Bureau.
The Dodd-Frank Act creates the CFPB within the Federal Reserve. The CFPB is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The CFPB has rulemaking authority over many of the statutes governing products and services offered to bank customers. For banking organizations with assets of more than $10 billion, the CFPB has exclusive rule-making and examination and primary enforcement authority under federal consumer financial laws. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the CFPB.
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•
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Deposit Insurance.
The Dodd-Frank Act makes permanent the general $250,000 deposit insurance limit for insured deposits. The Dodd-Frank Act also provides unlimited deposit coverage for noninterest-bearing transaction accounts until January 1, 2013. Amendments to the FDI Act also revise the assessment base against which an insured depository institution’s deposit insurance premiums paid to the DIF will be calculated. Under these amendments, the assessment base will no longer be the institution’s deposit base, but rather its average consolidated total assets less its average tangible equity. Additionally, the Dodd-Frank Act makes changes to the minimum designated reserve ratio of the DIF, increasing the minimum from 1.15% to 1.35% of the estimated amount of total insured deposits and eliminating the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds.
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•
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Transactions with Affiliates and Insiders.
The Dodd-Frank Act generally enhances the restrictions on transactions with affiliates under Sections 23A and 23B of the Federal Reserve Act, including an expansion of the definition of “covered transactions” and an increase in the amount of time for which collateral requirements regarding covered credit transactions must be satisfied. Insider transaction limitations are expanded through the strengthening of loan restrictions to insiders and the expansion of the types of transactions subject to the various limits, including derivatives transactions, repurchase agreements, reverse repurchase agreements and securities lending or borrowing transactions. Restrictions are also placed on certain asset sales to and from an insider to an institution, including requirements that such sales be on market terms and, in certain circumstances, approved by the institution’s board of directors.
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•
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Corporate Governance.
The Dodd-Frank Act addresses many investor protection, corporate governance and executive compensation matters that will affect most U.S. publicly traded companies, including the Company. The Dodd-Frank Act (1) grants stockholders of U.S. publicly traded companies an advisory vote on executive compensation; (2) enhances independence requirements for compensation committee members; (3) requires companies listed on national securities exchanges to adopt incentive-based compensation clawback policies for executive officers; and (4) provides the SEC with authority to adopt proxy access rules that would allow stockholders of publicly traded companies to nominate candidates for election as a director and have those nominees included in a company’s proxy materials.
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•
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Interchange Fees.
Under the so-called Durbin Amendment of the Dodd-Frank Act, interchange transaction fees that a card issuer receives or charges for an electronic debit transaction must be “reasonable and proportional” to the cost incurred by the card issuer in processing the transaction. Banks that have less than $10 billion in assets are exempt from the interchange transaction fee limitation. On June 29, 2011, the Federal Reserve issued a final rule establishing standards for determining whether the amount of any interchange transaction fee is reasonable and proportional, taking into consideration fraud prevention costs, and prescribing regulations to ensure that network fees are not used, directly or indirectly, to compensate card issuers with respect to electronic debit transactions or to circumvent or evade the restrictions that interchange transaction fees be reasonable and proportional. Under the final rule, the maximum permissible interchange fee that an issuer may receive for an electronic debit will be the sum of $0.21 per transaction and five basis points multiplied by the value of the transaction. The Federal Board also approved on June 29, 2011 an interim final rule that allows for an upward adjustment of no more than $0.01 to an issuer’s debit card interchange fee if the issuer develops and implements policies and procedures reasonably designed to achieve certain fraud-prevention standards set out in the interim final rule. The Dodd-Frank Act also bans card issuers and payment card networks from entering into exclusivity arrangements for debit card processing and prohibits card issuers and payment networks from inhibiting the ability of merchants to direct the routing of debit card transactions over networks of their choice. Finally, merchants will be able to set minimum dollar amounts for the use of a credit card and provide discounts to consumers who pay with various payment methods, such as cash.
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Name
|
Position
|
||
R. Eugene Taylor
|
President, Chief Executive Officer and Chairman of the Board
|
||
Christopher G. Marshall
|
Executive Vice President, Chief Financial Officer and Director
|
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R. Bruce Singletary
|
Executive Vice President, Chief Risk Officer and Director
|
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Charles F. Atkins
|
Director
|
||
Peter N. Foss
|
Director
|
||
William A. Hodges
|
Director
|
||
Oscar A. Keller III
|
Director
|
•
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cash flow of the borrower and/or the project being financed;
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•
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the changes and uncertainties as to the future value of the collateral, in the case of a collateralized loan;
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•
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the duration of the loan;
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•
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the discount on the loan at the time of acquisition;
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•
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the credit history of a particular borrower; and
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•
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changes in economic and industry conditions.
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•
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the ability to develop, maintain and build upon long-term customer relationships based on quality service and high ethical standards;
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•
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the ability to attract and retain qualified employees to operate the Bank’s business effectively;
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•
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the ability to expand the Bank’s market position;
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•
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the scope, relevance and pricing of products and services offered to meet customer needs and demands;
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•
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the rate at which the Bank introduces new products and services relative to its competitors;
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•
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customer satisfaction with the Bank’s level of service; and
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•
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industry and general economic trends.
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•
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the ability of its officers and other key employees to continue to implement and improve its operational, credit, financial, management and other internal risk controls and processes and its reporting systems and procedures in order to manage a growing number of client relationships;
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•
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to scale its technology platform;
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•
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to integrate its acquisitions and develop consistent policies throughout the various businesses; and
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•
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to manage a growing number of client relationships.
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•
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the effect of the acquisition on competition;
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•
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the financial condition and future prospects of the applicant and the banks involved;
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•
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the managerial resources of the applicant and the banks involved;
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•
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the convenience and needs of the community, including the record of performance under the Community Reinvestment Act (which we refer to as the “CRA”); and
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•
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the effectiveness of the applicant in combating money laundering activities.
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•
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changes to regulatory capital requirements;
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•
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exclusion of hybrid securities, including trust preferred securities, issued on or after May 19, 2010 from Tier 1 capital;
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•
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creation of new government regulatory agencies (such as the Financial Stability Oversight Council, which will oversee systemic risk, and the Consumer Financial Protection Bureau, which will develop and enforce rules for bank and non-bank providers of consumer financial products);
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•
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potential limitations on federal preemption;
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•
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changes to deposit insurance assessments;
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•
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regulation of debit interchange fees the Bank earns;
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•
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changes in retail banking regulations, including potential limitations on certain fees the Bank may charge; and
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•
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changes in regulation of consumer mortgage loan origination and risk retention.
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•
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stockholders are commonly controlled or managed;
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|
•
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stockholders are parties to an oral or written agreement or understanding regarding the acquisition, voting or transfer of control of voting securities of a bank or bank holding company;
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•
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the holders each own stock in a bank and are also management officials, controlling stockholders, partners or trustees of another company; or
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•
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both a holder and a controlling stockholder, partner, trustee or management official of the holder own equity in the bank or bank holding company.
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•
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general market conditions;
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•
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domestic and international economic factors unrelated to CBF or Capital Bank’s performance;
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•
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actual or anticipated fluctuations in CBF or Capital Bank’s quarterly operating results;
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•
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changes in or failure to meet publicly disclosed expectations as to CBF or Capital Bank’s future financial performance;
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•
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downgrades in securities analysts’ estimates of CBF or Capital Bank’s financial performance or lack of research and reports by industry analysts;
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•
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changes in market valuations or earnings of similar companies;
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•
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any future sales of CBF’s common stock or other securities; and
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•
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additions or departures of key personnel.
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High
|
Low
|
Cash Dividends
per Share Declared
|
||||||||
2011
|
||||||||||
First quarter
|
$
|
3.92
|
$
|
2.44
|
$
|
0.00
|
||||
Second quarter
|
4.55
|
3.16
|
0.00
|
|||||||
Third quarter
|
3.77
|
2.08
|
0.00
|
|||||||
Fourth quarter
|
2.45
|
1.84
|
0.00
|
|||||||
2010
|
||||||||||
First quarter
|
$
|
4.70
|
$
|
3.00
|
$
|
0.00
|
||||
Second quarter
|
6.95
|
3.01
|
0.00
|
|||||||
Third quarter
|
3.53
|
1.60
|
0.00
|
|||||||
Fourth quarter
|
3.09
|
1.50
|
0.00
|
Period Ending
|
||||||||
Index
|
12/06
|
12/07
|
12/08
|
12/09
|
12/10
|
12/11
|
||
Capital Bank Corporation
|
100.00
|
60.88
|
35.43
|
22.31
|
14.37
|
11.60
|
||
NASDAQ Composite
|
100.00
|
109.81
|
65.29
|
93.95
|
109.84
|
107.86
|
||
NASDAQ Bank Index
|
100.00
|
77.93
|
59.29
|
48.32
|
54.06
|
47.34
|
Successor
Company
|
Predecessor
Company
|
||||||||||||||||
(Dollars in thousands)
|
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||
Selected Balance Sheet Data
|
|||||||||||||||||
Cash and cash equivalents
|
$
|
2,163
|
$
|
66,745
|
$
|
29,513
|
$
|
54,455
|
$
|
40,172
|
|||||||
Investment securities
|
–
|
223,292
|
245,492
|
278,138
|
259,116
|
||||||||||||
Loans
|
–
|
1,254,479
|
1,390,302
|
1,254,368
|
1,095,107
|
||||||||||||
Allowance for loan losses
|
–
|
36,061
|
26,081
|
14,795
|
13,571
|
||||||||||||
Investment in and advance to Capital Bank, NA
|
247,121
|
–
|
–
|
–
|
–
|
||||||||||||
Intangible assets
|
–
|
1,774
|
2,711
|
3,857
|
63,345
|
||||||||||||
Total assets
|
249,742
|
1,585,547
|
1,734,668
|
1,654,232
|
1,517,603
|
||||||||||||
Deposits
|
–
|
1,343,286
|
1,377,965
|
1,315,314
|
1,098,698
|
||||||||||||
Borrowings and repurchase agreements
|
–
|
121,000
|
173,543
|
147,010
|
208,642
|
||||||||||||
Subordinated debentures
|
19,163
|
34,323
|
30,930
|
30,930
|
30,930
|
||||||||||||
Shareholders’ equity
|
224,864
|
76,688
|
139,785
|
148,514
|
164,300
|
||||||||||||
Tangible common equity
1
|
224,864
|
33,635
|
95,795
|
103,378
|
100,955
|
1
|
Tangible common equity is a non-GAAP measure calculated as total shareholders’ equity less preferred stock and less goodwill and other intangible assets, net.
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
Year
Ended
Dec. 31, 2008
|
Year
Ended
Dec. 31, 2007
|
||||||||||||||
Summary of Operations
|
||||||||||||||||||||
Interest income
|
$
|
31,441
|
$
|
5,955
|
$
|
77,722
|
$
|
83,141
|
$
|
85,020
|
$
|
94,537
|
||||||||
Interest expense
|
6,528
|
1,996
|
26,759
|
34,263
|
42,424
|
50,423
|
||||||||||||||
Net interest income
|
24,913
|
3,959
|
50,963
|
48,878
|
42,596
|
44,114
|
||||||||||||||
Provision for loan losses
|
1,450
|
40
|
58,545
|
23,064
|
3,876
|
3,606
|
||||||||||||||
Net interest income (loss) after provision for loan losses
|
23,463
|
3,919
|
(7,582
|
)
|
25,814
|
38,720
|
40,508
|
|||||||||||||
Noninterest income
|
7,362
|
832
|
15,549
|
10,167
|
11,051
|
9,511
|
||||||||||||||
Noninterest expense
|
25,277
|
4,155
|
54,309
|
49,810
|
106,662
|
39,037
|
||||||||||||||
Net income (loss) before taxes
|
5,548
|
596
|
(46,342
|
)
|
(13,829
|
)
|
(56,891
|
)
|
10,982
|
|||||||||||
Income tax expense (benefit)
|
281
|
–
|
15,124
|
(7,013
|
)
|
(1,207
|
)
|
3,124
|
||||||||||||
Net income (loss)
|
5,267
|
596
|
(61,466
|
)
|
(6,816
|
)
|
(55,684
|
)
|
7,858
|
|||||||||||
Dividends and accretion on preferred stock
|
–
|
861
|
2,355
|
2,352
|
124
|
–
|
||||||||||||||
Net income (loss) attributable to common shareholders
|
$
|
5,267
|
(265
|
)
|
$
|
(63,821
|
)
|
$
|
(9,168
|
)
|
$
|
(55,808
|
)
|
$
|
7,858
|
Successor
Company
|
Predecessor
Company
|
||||||||||||||||||||
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
Year
Ended
Dec. 31, 2008
|
Year
Ended
Dec. 31, 2007
|
||||||||||||||||
Per Share Data
|
|||||||||||||||||||||
Net income (loss) – basic
|
$
|
0.06
|
$
|
(0.02
|
)
|
$
|
(4.98
|
)
|
$
|
(0.80
|
)
|
$
|
(4.94
|
)
|
$
|
0.69
|
|||||
Net income (loss) – diluted
|
0.06
|
(0.02
|
)
|
(4.98
|
)
|
(0.80
|
)
|
(4.94
|
)
|
0.68
|
|||||||||||
Book value
|
2.62
|
NA
|
2.75
|
8.68
|
9.54
|
14.71
|
|||||||||||||||
Tangible book value
|
2.23
|
NA
|
2.67
|
8.50
|
9.29
|
9.16
|
|||||||||||||||
Common stock dividends
|
–
|
–
|
–
|
0.32
|
0.32
|
0.32
|
|||||||||||||||
Common shares outstanding
|
85,802,164
|
12,877,846
|
12,877,846
|
11,348,117
|
11,238,085
|
11,169,777
|
|||||||||||||||
Diluted shares outstanding
|
85,649,203
|
13,188,612
|
12,810,905
|
11,470,314
|
11,302,769
|
11,492,728
|
|||||||||||||||
Basic shares outstanding
|
85,649,203
|
13,188,612
|
12,810,905
|
11,470,314
|
11,302,769
|
11,424,171
|
|||||||||||||||
Performance Ratios
|
|||||||||||||||||||||
Return on average shareholders’ equity
|
2.54
|
%
|
9.12
|
%
|
(47.86
|
)%
|
(4.62
|
)%
|
(32.93
|
)%
|
4.78
|
%
|
|||||||||
Return on average assets
|
0.64
|
0.45
|
(3.63
|
)
|
(0.40
|
)
|
(3.52
|
)
|
0.54
|
||||||||||||
Net interest margin
1
|
4.13
|
3.09
|
3.27
|
3.14
|
3.07
|
3.52
|
|||||||||||||||
Efficiency ratio
2
|
78.32
|
86.73
|
81.65
|
84.36
|
77.30
|
72.80
|
|||||||||||||||
Capital Ratios
|
|||||||||||||||||||||
Tangible equity to tangible assets
|
90.04
|
%
|
NA
|
% |
4.73
|
%
|
7.91
|
%
|
8.77
|
%
|
6.94
|
%
|
|||||||||
Tangible common equity to tangible assets
|
90.04
|
NA
|
2.12
|
5.53
|
6.26
|
6.94
|
|||||||||||||||
Average shareholders’ equity to average total assets
|
25.22
|
4.92
|
7.59
|
8.72
|
10.68
|
11.32
|
|||||||||||||||
Leverage ratio
|
96.56
|
NA
|
6.45
|
8.94
|
10.58
|
9.10
|
|||||||||||||||
Tier 1 risk-based capital
|
96.95
|
NA
|
8.07
|
10.16
|
12.17
|
10.19
|
|||||||||||||||
Total risk-based capital
|
98.39
|
NA
|
9.59
|
11.41
|
13.24
|
11.28
|
|||||||||||||||
1
|
Net interest margin is presented on a tax equivalent basis.
|
2
|
Efficiency ratio is computed by dividing noninterest expense by the sum of net interest income and noninterest income, net of the goodwill impairment charge in 2008.
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||||||||
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
Year
Ended
Dec. 31, 2008
|
Year
Ended
Dec. 31, 2007
|
|||||||||||||||
Asset Quality Ratios
|
||||||||||||||||||||
Nonperforming loans to gross loans
|
NA
|
NA
|
5.73
|
%
|
2.84
|
%
|
0.73
|
%
|
0.55
|
%
|
||||||||||
Nonperforming assets to total assets
|
NA
|
NA
|
5.69
|
2.90
|
0.63
|
0.50
|
||||||||||||||
Allowance for loan losses to gross loans
|
NA
|
NA
|
2.87
|
1.88
|
1.18
|
1.24
|
||||||||||||||
Allowance for loan losses to nonperforming loans
|
NA
|
NA
|
50.12
|
66.01
|
162.31
|
226.86
|
||||||||||||||
Net charge-offs to average loans
|
NA
|
NA
|
3.60
|
0.89
|
0.30
|
0.32
|
•
|
Allowance for Loan Losses
– The allowance for loan losses represents management’s estimate of probable credit losses that are inherent in the existing loan portfolio. Management’s calculation of the allowance for loan losses consists of reserves on loans individually evaluated for impairment and reserves on loans collectively evaluated for impairment. Specific reserves, or charge-offs, are applied to individually impaired loans based on estimated fair value. Reserves on collectively evaluated loans are determined by applying loss rates to pools of loans that are grouped according to loan type and internal risk ratings. Loss rates are based on historical loss experience in each pool and management’s consideration of certain environmental factors such as levels of and trends in delinquencies, impaired loans and classified assets; levels of and trends in charge-offs and recoveries; trends in nature, volume and terms of loans; existence of and changes in portfolio concentrations; changes in national, regional and local economic conditions; changes in the experience, ability and depth of lending management; changes in the quality of the loan review system; and the effect of other external factors such as legal and regulatory requirements. If economic conditions were to decline significantly or the financial conditions of the Bank’s customers were to deteriorate, additional increases to the allowance for loan losses may be required.
|
|
•
|
Other-Than-Temporary Impairment on Investment Securities
– Management evaluates each held-to-maturity and available-for-sale investment security in an unrealized loss position for other-than-temporary impairment based on an analysis of the facts and circumstances of each individual investment, which includes consideration of changes in general market conditions and changes in the financial strength of specific bond issuers. For debt securities determined to be other-than-temporarily impaired, the impairment is separated into the following: (1) the amount representing credit loss and (2) the amount related to all other factors. The amount representing credit loss is calculated based on management’s estimate of future cash flows and recoverability of the investment and is recorded in current earnings. Future adverse changes in market conditions or adverse changes in the financial strength of bond issuers could result in an other-than-temporary impairment charge that may impact earnings.
|
|
•
|
Income Tax Valuation Allowance
– A valuation allowance is recorded for deferred tax assets if management determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers recent and anticipated future taxable income and ongoing prudent and feasible tax planning strategies in determining the need, if any, for a valuation allowance.
|
|
•
|
Impairment of Long-Lived Assets
– Long-lived assets, including identified intangible assets other than goodwill, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognized if the sum of the undiscounted future cash flows is less than the carrying amount of the asset. Assets to be disposed of are transferred to other real estate owned and are reported at the lower of the carrying amount or fair value less costs to sell. Future events or circumstances indicating that the carrying value of long-lived assets is not recoverable may require an impairment charge to earnings.
|
•
|
Equity Method Investment –
Noncontrolling investments that give the Company the ability to influence the operating or financial decisions of the investee are accounted for as equity method investments. An investment (direct or indirect) of 20 percent or more of the voting stock of an investee generally indicates that the ability to exercise significant influence over an investee. The carrying amount of an equity method investment is adjusted based on the Company’s share of the earnings or losses of the investee after the date of investment and those recognized earnings or losses are reported as a component of noninterest income. In addition, the Company’s proportionate share of the investee’s equity adjustments for other comprehensive income are recorded as increases or decreases to the investment account with corresponding adjustments in equity.
|
|
•
|
Purchased Credit-Impaired Loans –
Loans acquired in a transfer, including business combinations and transactions similar to the CBF Investment, where there is evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments, are accounted for under accounting guidance for purchased credit-impaired (“PCI”) loans. This guidance provides that the excess of the cash flows initially expected to be collected over the fair value of the loans at the acquisition date (i.e., the accretable yield) is accreted into interest income over the estimated remaining life of the purchased credit-impaired loans using the effective yield method, provided that the timing and amount of future cash flows is reasonably estimable. Accordingly, such loans are not classified as nonaccrual and they are considered to be accruing because their interest income relates to the accretable yield recognized under accounting for purchased credit-impaired loans and not to contractual interest payments. The difference between the contractually required payments and the cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the nonaccretable difference.
|
•
|
Net income totaled $5.3 million, or $0.06 per share, in the successor period from January 29 to December 31, 2011;
|
|
•
|
Following the merger of GreenBank, the wholly-owned subsidiary of Green Bankshares, Inc. (“Green Bankshares”), into Capital Bank, NA, the Company held a 26% ownership interest in Capital Bank, NA, which has $6.5 billion in assets and operates 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia.
|
Successor Company
|
Predecessor Company
|
||||||||||||||||||||
(Dollars in thousands)
|
Period of
Jan. 29 to Dec. 31, 2011
|
Period of
Jan. 1 to Jan. 28, 2011
|
|||||||||||||||||||
Average
Balance
|
Amount
Earned
|
Average
Rate
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
||||||||||||||||
Assets
|
|||||||||||||||||||||
Loans
2
|
$
|
495,129
|
$
|
27,734
|
6.12
|
%
|
$
|
1,253,296
|
$
|
5,530
|
5.20
|
%
|
|||||||||
Investment securities
3
|
133,960
|
3,893
|
3.17
|
225,971
|
504
|
2.68
|
|||||||||||||||
Interest-bearing deposits
|
39,730
|
87
|
0.24
|
63,350
|
11
|
0.20
|
|||||||||||||||
Advance to Capital Bank, NA
|
1,869
|
170
|
9.94
|
–
|
–
|
–
|
|||||||||||||||
Total interest-earning assets
|
670,688
|
$
|
31,884
|
5.20
|
%
|
1,542,617
|
$
|
6,045
|
4.61
|
%
|
|||||||||||
Cash and due from banks
|
10,603
|
16,112
|
|||||||||||||||||||
Other assets
|
214,626
|
34,021
|
|||||||||||||||||||
Total assets
|
$
|
895,917
|
$
|
1,592,750
|
|||||||||||||||||
Liabilities and Equity
|
|||||||||||||||||||||
NOW and money market accounts
|
$
|
154,880
|
$
|
1,084
|
0.76
|
%
|
$
|
334,668
|
$
|
211
|
0.74
|
%
|
|||||||||
Savings accounts
|
14,352
|
16
|
0.12
|
30,862
|
3
|
0.11
|
|||||||||||||||
Time deposits
|
380,278
|
3,460
|
0.99
|
870,146
|
1,337
|
1.81
|
|||||||||||||||
Total interest-bearing deposits
|
549,510
|
4,560
|
0.91
|
1,235,676
|
1,551
|
1.48
|
|||||||||||||||
Borrowings
|
42,851
|
664
|
1.69
|
120,032
|
343
|
3.36
|
|||||||||||||||
Subordinated debentures
|
19,248
|
1,304
|
7.40
|
34,323
|
102
|
3.50
|
|||||||||||||||
Total interest-bearing liabilities
|
611,609
|
$
|
6,528
|
1.17
|
%
|
1,390,031
|
$
|
1,996
|
1.69
|
%
|
|||||||||||
Noninterest-bearing deposits
|
53,397
|
114,660
|
|||||||||||||||||||
Other liabilities
|
4,922
|
9,635
|
|||||||||||||||||||
Total liabilities
|
669,928
|
1,514,326
|
|||||||||||||||||||
Shareholders’ equity
|
225,989
|
78,424
|
|||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
895,917
|
$
|
1,592,750
|
|||||||||||||||||
Net interest spread
4
|
4.03
|
%
|
2.92
|
%
|
|||||||||||||||||
Tax equivalent adjustment
|
$
|
443
|
$
|
90
|
|||||||||||||||||
Net interest income and net interest margin
5
|
$
|
25,356
|
4.13
|
%
|
$
|
4,049
|
3.09
|
%
|
|||||||||||||
(continued on next page)
|
|||||||||||||||||||||
1
|
The tax equivalent adjustment is computed using a federal tax rate of 34% and is applied to interest income from tax exempt municipal loans and investment securities.
|
2
|
Loans include mortgage loans held for sale in addition to nonaccrual loans for which accrual of interest has not been recorded.
|
3
|
The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any.
|
4
|
Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
5
|
Net interest margin represents net interest income divided by average interest-earning assets.
|
Predecessor Company
|
||||||||||||||||||||
(Dollars in thousands)
|
Year Ended
Dec. 31, 2010
|
Year Ended
Dec. 31, 2009
|
||||||||||||||||||
Average
Balance
|
Amount
Earned
|
Average
Rate
|
Average
Balance
|
Amount
Earned
|
Average
Rate
|
|||||||||||||||
Assets
|
||||||||||||||||||||
Loans
2
|
$
|
1,353,191
|
$
|
69,084
|
5.11
|
%
|
$
|
1,316,737
|
$
|
70,412
|
5.35
|
%
|
||||||||
Investment securities
3
|
213,402
|
9,986
|
4.68
|
269,240
|
14,483
|
5.38
|
||||||||||||||
Interest-bearing deposits
|
38,003
|
89
|
0.23
|
25,312
|
42
|
0.17
|
||||||||||||||
Total interest-earning assets
|
1,604,596
|
$
|
79,159
|
4.93
|
%
|
1,611,289
|
$
|
84,937
|
5.27
|
%
|
||||||||||
Cash and due from banks
|
18,149
|
15,927
|
||||||||||||||||||
Other assets
|
68,910
|
64,748
|
||||||||||||||||||
Total assets
|
$
|
1,691,655
|
$
|
1,691,964
|
||||||||||||||||
Liabilities and Equity
|
||||||||||||||||||||
NOW and money market accounts
|
$
|
327,811
|
$
|
2,794
|
0.85
|
%
|
$
|
363,522
|
$
|
4,527
|
1.25
|
%
|
||||||||
Savings accounts
|
30,555
|
41
|
0.13
|
29,171
|
47
|
0.16
|
||||||||||||||
Time deposits
|
878,068
|
18,247
|
2.08
|
822,003
|
23,463
|
2.85
|
||||||||||||||
Total interest-bearing deposits
|
1,236,434
|
21,082
|
1.71
|
1,214,696
|
28,037
|
2.31
|
||||||||||||||
Borrowings
|
150,207
|
4,541
|
3.02
|
143,241
|
5,147
|
3.59
|
||||||||||||||
Subordinated debentures
|
33,550
|
1,131
|
3.37
|
30,930
|
1,055
|
3.41
|
||||||||||||||
Repurchase agreements
|
1,564
|
5
|
0.32
|
10,919
|
24
|
0.22
|
||||||||||||||
Total interest-bearing liabilities
|
1,421,755
|
$
|
26,759
|
1.88
|
%
|
1,399,786
|
$
|
34,263
|
2.45
|
%
|
||||||||||
Noninterest-bearing deposits
|
130,944
|
132,535
|
||||||||||||||||||
Other liabilities
|
10,519
|
12,148
|
||||||||||||||||||
Total liabilities
|
1,563,218
|
1,544,469
|
||||||||||||||||||
Shareholders’ equity
|
128,437
|
147,495
|
||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
1,691,655
|
$
|
1,691,964
|
||||||||||||||||
Net interest spread
4
|
3.05
|
%
|
2.82
|
%
|
||||||||||||||||
Tax equivalent adjustment
|
$
|
1,437
|
$
|
1,796
|
||||||||||||||||
Net interest income and net interest margin
5
|
$
|
52,400
|
3.27
|
%
|
$
|
50,674
|
3.14
|
%
|
||||||||||||
1
|
The tax equivalent adjustment is computed using a federal tax rate of 34% and is applied to interest income from tax exempt municipal loans and investment securities.
|
2
|
Loans include mortgage loans held for sale in addition to nonaccrual loans for which accrual of interest has not been recorded.
|
3
|
The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any.
|
4
|
Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
5
|
Net interest margin represents net interest income divided by average interest-earning assets.
|
Successor
Company
|
Predecessor
Company
|
||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
||||||||
Service charges and other fees
|
$
|
1,355
|
$
|
291
|
$
|
3,311
|
|||||
Bank card services
|
847
|
174
|
2,020
|
||||||||
Mortgage origination and other loan fees
|
518
|
210
|
1,861
|
||||||||
Brokerage fees
|
308
|
78
|
963
|
||||||||
Bank-owned life insurance
|
134
|
10
|
699
|
||||||||
Equity income from investment in Capital Bank, NA
|
4,045
|
–
|
–
|
||||||||
Net gain on sale of investment securities
|
–
|
–
|
5,855
|
||||||||
Other
|
155
|
69
|
840
|
||||||||
Total noninterest income
|
$
|
7,362
|
$
|
832
|
$
|
15,549
|
Capital Bank, NA
|
Jun. 30, 2011
to
Dec. 31, 2011
|
|||
(Dollars in thousands)
|
||||
Interest income
|
$
|
137,508
|
||
Interest expense
|
17,810
|
|||
Net interest income
|
119,698
|
|||
Provision for loan losses
|
28,636
|
|||
Noninterest income
|
28,710
|
|||
Noninterest expense
|
97,754
|
|||
Net income
|
$
|
13,984
|
Successor
Company
|
Predecessor
Company
|
||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
||||||||
Salaries and employee benefits
|
$
|
9,525
|
$
|
1,977
|
$
|
22,675
|
|||||
Occupancy
|
2,970
|
548
|
5,906
|
||||||||
Furniture and equipment
|
1,401
|
275
|
3,183
|
||||||||
Data processing and telecommunications
|
911
|
180
|
2,092
|
||||||||
Advertising and public relations
|
325
|
131
|
1,887
|
||||||||
Office expenses
|
498
|
93
|
1,260
|
||||||||
Professional fees
|
543
|
190
|
2,514
|
||||||||
Business development and travel
|
550
|
87
|
1,350
|
||||||||
Amortization of other intangible assets
|
478
|
62
|
937
|
||||||||
ORE losses and miscellaneous loan costs
|
1,608
|
176
|
5,006
|
||||||||
Directors’ fees
|
93
|
68
|
1,061
|
||||||||
FDIC deposit insurance
|
1,076
|
266
|
3,846
|
||||||||
Contract termination fees
|
3,955
|
–
|
–
|
||||||||
Other
|
1,344
|
102
|
2,592
|
||||||||
Total noninterest expense
|
$
|
25,277
|
$
|
4,155
|
$
|
54,309
|
(Dollars in thousands)
|
2010
|
2009
|
$ Change
|
% Change
|
|||||||||
Service charges and other fees
|
$
|
3,311
|
$
|
3,883
|
$
|
(572
|
)
|
(14.7
|
)%
|
||||
Bank card services
|
2,020
|
1,539
|
481
|
31.3
|
|||||||||
Mortgage origination and other loan fees
|
1,861
|
1,935
|
(74
|
)
|
(3.8
|
)
|
|||||||
Brokerage fees
|
963
|
698
|
265
|
38.0
|
|||||||||
Bank-owned life insurance
|
699
|
1,830
|
(1,131
|
)
|
(61.8
|
)
|
|||||||
Net gain on sale of investment securities
|
5,855
|
173
|
5,682
|
NM
|
|||||||||
Net other-than-temporary impairment losses on securities
|
–
|
(498
|
)
|
498
|
(100.0
|
)
|
|||||||
Other
|
840
|
607
|
233
|
38.4
|
|||||||||
Total noninterest income
|
$
|
15,549
|
$
|
10,167
|
$
|
5,382
|
52.9
|
%
|
(Dollars in thousands)
|
2010
|
2009
|
$ Change
|
% Change
|
|||||||||
Salaries and employee benefits
|
$
|
22,675
|
$
|
22,112
|
$
|
563
|
2.5
|
%
|
|||||
Occupancy
|
5,906
|
5,630
|
276
|
4.9
|
|||||||||
Furniture and equipment
|
3,183
|
3,155
|
28
|
0.9
|
|||||||||
Data processing and telecommunications
|
2,092
|
2,317
|
(225
|
)
|
(9.7
|
)
|
|||||||
Advertising and public relations
|
1,887
|
1,610
|
277
|
17.2
|
|||||||||
Office expenses
|
1,260
|
1,383
|
(123
|
)
|
(8.9
|
)
|
|||||||
Professional fees
|
2,514
|
1,488
|
1,026
|
69.0
|
|||||||||
Business development and travel
|
1,350
|
1,244
|
106
|
8.5
|
|||||||||
Amortization of other intangible assets
|
937
|
1,146
|
(209
|
)
|
(18.2
|
)
|
|||||||
ORE losses and miscellaneous loan costs
|
5,006
|
1,646
|
3,360
|
204.1
|
|||||||||
Directors’ fees
|
1,061
|
1,418
|
(357
|
)
|
(25.2
|
)
|
|||||||
FDIC deposit insurance
|
3,846
|
2,721
|
1,125
|
41.3
|
|||||||||
Other
|
2,592
|
3,940
|
(1,348
|
)
|
(34.2
|
)
|
|||||||
Total noninterest expense
|
$
|
54,309
|
$
|
49,810
|
$
|
4,499
|
9.0
|
%
|
Predecessor
Company
|
||||
(Dollars in thousands)
|
Dec. 31, 2010
|
|||
Available for sale:
|
||||
U.S. agency obligations
|
$
|
18,934
|
||
Municipal bonds
|
21,009
|
|||
Mortgage-backed securities issued by GSEs
|
165,423
|
|||
Non-agency mortgage-backed securities
|
6,587
|
|||
Other securities
|
3,038
|
|||
214,991
|
||||
Other investments
|
8,301
|
|||
Total
|
$
|
223,292
|
Predecessor Company
|
|||||||||||||||||||
December 31, 2010
|
Less than 12 Months
|
12 Months or Greater
|
Total
|
||||||||||||||||
(
Dollars in thousands)
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||
Available for sale:
|
|||||||||||||||||||
U.S. agency obligations
|
$
|
8,916
|
$
|
87
|
$
|
–
|
$
|
–
|
$
|
8,916
|
$
|
87
|
|||||||
Municipal bonds
|
14,886
|
1,134
|
2,453
|
387
|
17,339
|
1,521
|
|||||||||||||
Mortgage-backed securities issued by GSEs
|
14,473
|
195
|
–
|
–
|
14,473
|
195
|
|||||||||||||
Non-agency mortgage-backed securities
|
–
|
–
|
4,183
|
242
|
4,183
|
242
|
|||||||||||||
Other securities
|
–
|
–
|
2,536
|
214
|
2,536
|
214
|
|||||||||||||
Total
|
$
|
38,275
|
$
|
1,416
|
$
|
9,172
|
$
|
843
|
$
|
47,447
|
$
|
2,259
|
Predecessor Company
|
||||||||||||||||||||||||||||||||||
Less Than
1 Year
|
1–5 Years
|
5–10 Years
|
More Than
10 Years
|
Total
|
||||||||||||||||||||||||||||||
December 31, 2010
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Other
|
Amount
|
Yield
|
|||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||
Available for Sale:
|
||||||||||||||||||||||||||||||||||
U.S. agency securities
|
$
|
–
|
–
|
%
|
$
|
15,962
|
1.07
|
%
|
$
|
2,972
|
2.14
|
%
|
$
|
–
|
–
|
%
|
$
|
–
|
$
|
18,934
|
1.24
|
%
|
||||||||||||
Municipal bonds
1
|
301
|
4.52
|
1,880
|
5.14
|
555
|
6.29
|
18,273
|
6.09
|
–
|
21,009
|
6.00
|
|||||||||||||||||||||||
MBSs issued by GSEs
|
–
|
–
|
62
|
5.16
|
43,707
|
2.00
|
121,654
|
2.89
|
–
|
165,423
|
2.66
|
|||||||||||||||||||||||
Non-agency MBSs
|
–
|
–
|
–
|
–
|
1,369
|
4.79
|
5,218
|
4.98
|
–
|
6,587
|
4.94
|
|||||||||||||||||||||||
Corporate bonds
2
|
–
|
–
|
–
|
–
|
798
|
3.80
|
502
|
–
|
–
|
1,300
|
2.53
|
|||||||||||||||||||||||
Other securities
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
1,738
|
1,738
|
–
|
|||||||||||||||||||||||
Total
|
$
|
301
|
4.52
|
%
|
$
|
17,904
|
1.51
|
%
|
$
|
49,401
|
2.16
|
%
|
$
|
145,647
|
3.36
|
%
|
$
|
1,738
|
$
|
214,991
|
2.90
|
%
|
||||||||||||
1
|
Municipal bonds shown at tax equivalent yield computed using a federal tax rate of 34%.
|
2
|
Corporate bond due after ten years is an other-than-temporarily impaired corporate bond for which the Company is no longer accruing interest.
|
Predecessor Company
|
||||||||||||||||||||||||
Less Than
1 Year
|
1–5 Years
|
More Than
5 Years
|
Total
|
|||||||||||||||||||||
December 31, 2010
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Commercial real estate – non-owner occupied
|
$
|
298,681
|
5.25
|
%
|
$
|
312,998
|
5.70
|
%
|
$
|
22,851
|
6.47
|
%
|
$
|
634,530
|
5.52
|
%
|
||||||||
Consumer real estate
|
25,360
|
5.57
|
65,772
|
6.20
|
171,823
|
4.39
|
262,955
|
4.96
|
||||||||||||||||
Commercial real estate – owner occupied
|
24,414
|
5.99
|
125,998
|
6.07
|
20,058
|
6.36
|
170,470
|
6.09
|
||||||||||||||||
Commercial and industrial
|
70,124
|
5.29
|
70,586
|
5.32
|
4,725
|
6.25
|
145,435
|
5.34
|
||||||||||||||||
Consumer
|
1,814
|
6.24
|
2,863
|
7.46
|
1,486
|
9.24
|
6,163
|
7.53
|
||||||||||||||||
Other
|
5,380
|
5.56
|
4,401
|
6.13
|
23,961
|
4.70
|
33,742
|
5.02
|
||||||||||||||||
Total
|
$
|
425,773
|
5.32
|
%
|
$
|
582,618
|
5.80
|
%
|
$
|
244,904
|
4.84
|
%
|
$
|
1,253,295
|
5.45
|
%
|
Predecessor Company
|
||||||||||||||||||||||||
Fixed Rate
|
Floating Rate
|
Adjustable Rate
|
Total
|
|||||||||||||||||||||
December 31, 2010
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Due after 1 year:
|
||||||||||||||||||||||||
Commercial real estate – non-owner occupied
|
$
|
169,117
|
6.42
|
%
|
$
|
164,304
|
5.07
|
%
|
$
|
2,428
|
5.27
|
%
|
$
|
335,849
|
5.75
|
%
|
||||||||
Commercial real estate – owner occupied
|
126,773
|
6.42
|
16,258
|
4.06
|
3,025
|
3.86
|
146,056
|
6.11
|
||||||||||||||||
Commercial and industrial
|
26,652
|
6.56
|
42,106
|
4.89
|
6,553
|
3.72
|
75,311
|
5.38
|
||||||||||||||||
Total
|
$
|
322,542
|
6.43
|
%
|
$
|
222,668
|
4.96
|
%
|
$
|
12,006
|
4.07
|
%
|
$
|
557,216
|
5.79
|
%
|
Predecessor Company
|
||||||||||||||||
December 31, 2010
|
Outstanding
Balance
|
Unfunded
Commitments
|
Number
of Loans
|
Remaining
Interest
Reserves
|
Balance on
Nonaccrual
|
|||||||||||
(Dollars in thousands)
|
||||||||||||||||
Residential ADC
|
$
|
12,702
|
$
|
1,009
|
14
|
$
|
351
|
$
|
3,311
|
|||||||
Commercial ADC
|
35,281
|
6,174
|
14
|
974
|
–
|
|||||||||||
Total
1
|
$
|
47,983
|
$
|
7,183
|
28
|
$
|
1,325
|
3,311
|
1
|
Excludes loans where interest reserves have previously been depleted and the borrower is paying from other sources.
|
Predecessor Company
|
||||
(Dollars in thousands)
|
Dec. 31, 2010
|
|||
Nonperforming assets:
|
||||
Nonperforming loans:
|
||||
Commercial real estate
|
$
|
53,371
|
||
Consumer real estate
|
3,758
|
|||
Commercial owner occupied
|
8,198
|
|||
Commercial and industrial
|
5,830
|
|||
Consumer
|
6
|
|||
Other loans
|
781
|
|||
Total nonperforming loans
|
71,944
|
|||
Other real estate:
|
||||
Construction, land development, and other land
|
10,797
|
|||
1-4 family residential properties
|
4,529
|
|||
1-4 family residential properties sold with 100% financing
|
1,004
|
|||
Commercial properties
|
1,086
|
|||
Closed branch office
|
918
|
|||
Total other real estate
|
18,334
|
|||
Total nonperforming assets
|
90,278
|
|||
Performing restructured loans
|
4,463
|
|||
Total nonperforming assets and restructured loans
|
$
|
94,741
|
||
Asset quality ratios:
|
||||
Nonperforming loans to total loans
|
5.73
|
%
|
||
Nonperforming assets to total assets
|
5.69
|
|||
Nonperforming assets and restructured loans to total assets
|
5.98
|
|||
Allowance for loan losses to total loans
|
2.87
|
|||
Allowance for loan losses to nonperforming loans
|
50.12
|
Predecessor Company
|
||||
(Dollars in thousands)
|
Dec. 31, 2010
|
|||
Impaired loans:
|
||||
Impaired loans with related allowance for loan losses
|
$
|
2,378
|
||
Impaired loans for which the full loss has been charged off
|
74,141
|
|||
Total impaired loans
|
76,519
|
|||
Allowance for loan losses related to impaired loans
|
(529
|
)
|
||
Net carrying value of impaired loans
|
$
|
75,990
|
||
Performing TDRs:
|
||||
Commercial real estate
|
$
|
3,856
|
||
Consumer real estate
|
121
|
|||
Commercial owner occupied
|
421
|
|||
Commercial and industrial
|
65
|
|||
Consumer
|
–
|
|||
Total performing TDRs
|
$
|
4,463
|
Successor
Company
|
Predecessor
Company
|
||||||||||||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
% of
Total
Allowance
|
Amount
|
% of
Total
Allowance
|
Amount
|
% of
Total
Allowance
|
Amount
|
% of
Total
Allowance
|
Amount
|
% of
Total
Allowance
|
|||||||||||||||||||||
Commercial
|
$
|
–
|
–
|
%
|
$
|
21,734
|
60
|
%
|
$
|
14,187
|
54
|
%
|
$
|
9,749
|
66
|
%
|
$
|
10,231
|
75
|
%
|
|||||||||||
Construction
|
–
|
–
|
11,499
|
32
|
10,343
|
40
|
3,548
|
24
|
1,812
|
13
|
|||||||||||||||||||||
Consumer
|
–
|
–
|
614
|
2
|
481
|
2
|
620
|
4
|
631
|
5
|
|||||||||||||||||||||
Home equity lines
|
–
|
–
|
1,003
|
3
|
491
|
2
|
570
|
4
|
419
|
3
|
|||||||||||||||||||||
Mortgage
|
–
|
–
|
1,211
|
3
|
579
|
2
|
308
|
2
|
478
|
4
|
|||||||||||||||||||||
Total
|
$
|
–
|
–
|
%
|
$
|
36,061
|
100
|
%
|
$
|
26,081
|
100
|
%
|
$
|
14,795
|
100
|
%
|
$
|
13,571
|
100
|
%
|
Successor
Company
|
Predecessor
Company
|
||||||||||||||||||||||||
(Dollars in thousands)
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||||
Amount
|
% of
Total
Allowance
|
Amount
|
% of
Total
Allowance
|
Amount
|
% of
Total
Allowance
|
Amount
|
% of
Total
Allowance
|
||||||||||||||||||
Commercial real estate
|
$
|
–
|
–
|
%
|
$
|
20,995
|
58
|
%
|
$
|
14,987
|
58
|
%
|
$
|
6,825
|
46
|
%
|
|||||||||
Consumer real estate
|
–
|
–
|
4,732
|
13
|
2,383
|
9
|
2,360
|
16
|
|||||||||||||||||
Commercial owner occupied
|
–
|
–
|
3,395
|
9
|
2,650
|
10
|
1,878
|
13
|
|||||||||||||||||
Commercial and industrial
|
–
|
–
|
6,432
|
18
|
5,536
|
21
|
3,233
|
22
|
|||||||||||||||||
Consumer
|
–
|
–
|
354
|
1
|
326
|
1
|
316
|
2
|
|||||||||||||||||
Other loans
|
–
|
–
|
153
|
1
|
199
|
1
|
183
|
1
|
|||||||||||||||||
Total
|
$
|
–
|
–
|
%
|
$
|
36,061
|
100
|
%
|
$
|
26,081
|
100
|
%
|
$
|
14,795
|
100
|
%
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||||||||
(Dollars in thousands)
|
Jan. 29
to
Dec. 31, 2011
|
Jan. 1
to
Jan. 28, 2011
|
Year
Ended
2010
|
Year
Ended
2009
|
Year
Ended
2008
|
Year
Ended
2007
|
||||||||||||||
Balance at beginning of period, predecessor
|
$
|
–
|
$
|
36,061
|
$
|
26,081
|
$
|
14,795
|
$
|
13,571
|
$
|
13,347
|
||||||||
Adjustment for loans acquired in acquisition
|
–
|
–
|
–
|
845
|
–
|
|||||||||||||||
Net charge-offs:
|
||||||||||||||||||||
Loans charged off:
|
||||||||||||||||||||
Commercial real estate
|
–
|
–
|
38,220
|
8,026
|
1,991
|
1,292
|
||||||||||||||
Consumer real estate
|
337
|
26
|
3,923
|
2,016
|
125
|
2,264
|
||||||||||||||
Commercial and industrial
|
–
|
12
|
6,639
|
1,903
|
1,658
|
1,265
|
||||||||||||||
Consumer
|
2
|
11
|
429
|
252
|
794
|
403
|
||||||||||||||
Other loans
|
–
|
209
|
–
|
–
|
28
|
|||||||||||||||
Total charge-offs
|
339
|
49
|
49,420
|
12,197
|
4,568
|
5,252
|
||||||||||||||
Recoveries of loans previously charged off:
|
||||||||||||||||||||
Commercial real estate
|
–
|
4
|
664
|
200
|
650
|
455
|
||||||||||||||
Consumer real estate
|
–
|
3
|
54
|
107
|
28
|
1,295
|
||||||||||||||
Commercial and industrial
|
–
|
1
|
115
|
63
|
316
|
9
|
||||||||||||||
Consumer
|
–
|
1
|
22
|
49
|
77
|
111
|
||||||||||||||
Total recoveries
|
–
|
9
|
855
|
419
|
1,071
|
1,870
|
||||||||||||||
Total net charge-offs
|
339
|
40
|
48,565
|
11,778
|
3,497
|
3,382
|
||||||||||||||
Provision for loan losses
|
1,450
|
40
|
58,545
|
23,064
|
3,876
|
3,606
|
||||||||||||||
Merger of Old Capital Bank into Capital
Bank, NA
|
(1,111
|
)
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||
Balance at end of period, predecessor
|
–
|
36,061
|
36,061
|
26,081
|
14,795
|
13,571
|
||||||||||||||
Acquisition accounting adjustment
|
–
|
(36,061
|
)
|
–
|
–
|
–
|
–
|
|||||||||||||
Balance at end of period, successor
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
||||||||
Net charge-offs to average loans during the year
|
NA
|
NA
|
3.60
|
%
|
0.89
|
%
|
0.30
|
%
|
0.32
|
%
|
•
|
Levels of and trends in delinquencies, impaired loans and classified assets;
|
|
•
|
Levels of and trends in charge-offs and recoveries;
|
|
•
|
Trends in nature, volume and terms of loans;
|
|
•
|
Existence of and changes in portfolio concentrations by product type and geographical location;
|
|
•
|
Changes in national, regional and local economic conditions;
|
|
•
|
Changes in the experience, ability and depth of lending management;
|
|
•
|
Changes in the quality of the loan review system; and
|
|
•
|
The effect of other external factors such as legal and regulatory requirements.
|
Residential Construction & Development
Loan Analysis by Type:
|
Residential
Land /
Development
|
Residential
Construction
|
Total
|
|||||||
(Dollars in thousands)
|
||||||||||
December 31, 2010 (
Predecessor Company)
|
||||||||||
Loans outstanding
|
$
|
102,797
|
$
|
77,120
|
$
|
179,917
|
||||
Nonaccrual loans
|
35,934
|
3,180
|
39,114
|
|||||||
Allowance for loan losses
|
4,975
|
3,996
|
8,971
|
|||||||
YTD net charge-offs
|
27,096
|
3,382
|
30,478
|
|||||||
Loans outstanding to total loans
|
8.19
|
%
|
6.15
|
%
|
14.34
|
%
|
||||
Nonaccrual loans to loans in category
|
34.96
|
4.12
|
21.74
|
|||||||
Allowance to loans in category
|
4.84
|
5.18
|
4.99
|
|||||||
YTD net charge-offs to average loans in category (annualized)
|
20.41
|
3.80
|
13.75
|
Loan Analysis by Region:
|
Loans
Outstanding
|
Percent of
Total Loans
Outstanding
|
Nonaccrual
Loans
|
Nonaccrual
Loans
to Loans
Outstanding
|
Allowance
for Loan
Losses
|
Allowance
to Loans
Outstanding
|
|||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
December 31, 2010 (
Predecessor Company)
|
|||||||||||||||||||
Triangle
|
$
|
134,858
|
74.96
|
%
|
$
|
30,310
|
22.48
|
%
|
$
|
6,898
|
5.12
|
%
|
|||||||
Sandhills
|
24,816
|
13.79
|
979
|
3.95
|
1,080
|
4.35
|
|||||||||||||
Triad
|
4,584
|
2.55
|
–
|
–
|
417
|
9.10
|
|||||||||||||
Western
|
15,659
|
8.70
|
7,825
|
49.97
|
576
|
3.68
|
|||||||||||||
Total
|
$
|
179,917
|
100.00
|
%
|
$
|
39,114
|
21.74
|
%
|
$
|
8,971
|
4.99
|
%
|
and Other CRE Loan
Analysis by Type:
|
Commercial Land /
Development
|
Commercial
Construction
|
Multifamily
|
Other Non-
Residential CRE
|
Total
|
|||||||||||
(Dollars in thousands)
|
||||||||||||||||
December 31, 2010 (
Predecessor Company)
|
||||||||||||||||
Loans outstanding
|
$
|
121,415
|
$
|
49,255
|
$
|
39,831
|
$
|
244,112
|
$
|
454,613
|
||||||
Nonaccrual loans
|
11,579
|
–
|
–
|
2,678
|
14,257
|
|||||||||||
Allowance for loan losses
|
5,122
|
1,268
|
668
|
4,966
|
12,024
|
|||||||||||
YTD net charge-offs
|
1,641
|
(3
|
)
|
10
|
1,061
|
2,709
|
||||||||||
Loans outstanding to total loans
|
9.68
|
%
|
3.93
|
%
|
3.18
|
%
|
19.46
|
%
|
36.24
|
%
|
||||||
Nonaccrual loans to loans in category
|
9.54
|
–
|
–
|
1.10
|
3.14
|
|||||||||||
Allowance to loans in category
|
4.22
|
2.57
|
1.68
|
2.03
|
2.64
|
|||||||||||
YTD net charge-offs to average loans in category (annualized)
|
1.31
|
(0.01
|
)
|
0.02
|
0.48
|
0.61
|
and Other CRE Loan Analysis by Region:
|
Loans
Outstanding
|
Percent of
Total Loans
Outstanding
|
Nonaccrual
Loans
|
Nonaccrual
Loans
to Loans
Outstanding
|
Allowance
for Loan
Losses
|
Allowance
to Loans
Outstanding
|
|||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
December 31, 2010 (
Predecessor Company)
|
|||||||||||||||||||
Triangle
|
$
|
291,377
|
64.09
|
%
|
$
|
13,364
|
4.59
|
%
|
$
|
7,240
|
2.48
|
%
|
|||||||
Sandhills
|
66,292
|
14.58
|
815
|
1.23
|
2,504
|
3.78
|
|||||||||||||
Triad
|
41,441
|
9.12
|
–
|
–
|
1,122
|
2.71
|
|||||||||||||
Western
|
55,503
|
12.21
|
78
|
0.14
|
1,158
|
2.09
|
|||||||||||||
Total
|
$
|
454,613
|
100.00
|
%
|
$
|
14,257
|
3.14
|
%
|
$
|
12,024
|
2.64
|
%
|
Predecessor Company
|
|||||||||||||
December 31, 2010
|
Time Deposits
$100,000 or Greater
|
Time Deposits
Less than $100,000
|
|||||||||||
(Dollars in thousands)
|
Amount
|
Weighted
Average Rate
|
Amount
|
Weighted
Average Rate
|
|||||||||
Three months or less
|
$
|
13,952
|
1.11
|
%
|
$
|
77,004
|
0.64
|
%
|
|||||
Over three months to one year
|
28,930
|
1.76
|
114,686
|
1.15
|
|||||||||
Over one year to three years
|
253,107
|
1.95
|
315,341
|
1.87
|
|||||||||
Over three years
|
31,463
|
2.73
|
38,847
|
2.71
|
|||||||||
$
|
327,452
|
1.97
|
%
|
$
|
545,878
|
1.61
|
%
|
Successor Company
|
|||||||||||||||||||
Minimum Requirements To Be:
|
|||||||||||||||||||
December 31, 2011
|
Actual
|
Adequately Capitalized
|
Well Capitalized
|
||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||
Capital Bank Corporation:
|
|||||||||||||||||||
Total capital (to risk-weighted assets)
|
$
|
244,027
|
98.39
|
%
|
$
|
19,841
|
8.00
|
%
|
N/A
|
N/A
|
|||||||||
Tier I capital (to risk-weighted assets)
|
240,437
|
96.95
|
9,920
|
4.00
|
N/A
|
N/A
|
|||||||||||||
Tier I capital (to average assets)
|
240,437
|
96.56
|
9,960
|
4.00
|
N/A
|
N/A
|
|||||||||||||
Capital Bank, NA:
|
|||||||||||||||||||
Total capital (to risk-weighted assets)
|
$
|
687,971
|
16.67
|
%
|
$
|
330,201
|
8.00
|
%
|
$
|
412,752
|
10.00
|
%
|
|||||||
Tier I capital (to risk-weighted assets)
|
649,523
|
15.74
|
165,101
|
4.00
|
247,651
|
6.00
|
%
|
||||||||||||
Tier I capital (to average assets)
|
649,523
|
10.38
|
250,180
|
4.00
|
312,725
|
5.00
|
%
|
Successor Company
|
||||||||||||||||
December 31, 2011
|
Payments Due by Period
|
|||||||||||||||
(Dollars in thousands)
|
Less Than
1 Year
|
1–3
Years
|
3–5
Years
|
More Than
5 Years
|
Total
Committed
|
|||||||||||
Contractual obligations:
|
||||||||||||||||
Borrowings
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
||||||
Subordinated debentures
|
–
|
–
|
–
|
19,163
|
19,163
|
|||||||||||
Operating leases
|
–
|
–
|
–
|
–
|
–
|
|||||||||||
$
|
–
|
$
|
–
|
$
|
–
|
$
|
19,163
|
$
|
19,163
|
Successor
Company
|
Predecessor
Company
|
|||||||
(Dollars in thousands)
|
Dec. 31, 2011
|
Dec. 31, 2010
|
||||||
Assets
|
||||||||
Cash and cash equivalents:
|
||||||||
Cash and due from banks
|
$
|
2,163
|
$
|
13,646
|
||||
Interest-bearing deposits with banks
|
–
|
53,099
|
||||||
Total cash and cash equivalents
|
2,163
|
66,745
|
||||||
Investment securities:
|
||||||||
Investment securities – available for sale, at fair value
|
–
|
214,991
|
||||||
Other investments
|
–
|
8,301
|
||||||
Total investment securities
|
–
|
223,292
|
||||||
Mortgage loans held for sale
|
–
|
6,993
|
||||||
Loans:
|
||||||||
Loans – net of unearned income and deferred fees
|
–
|
1,254,479
|
||||||
Allowance for loan losses
|
–
|
(36,061
|
)
|
|||||
Net loans
|
–
|
1,218,418
|
||||||
Investment in and advance to Capital Bank, NA
|
247,121
|
–
|
||||||
Other real estate
|
–
|
18,334
|
||||||
Premises and equipment, net
|
–
|
25,034
|
||||||
Other intangible assets, net
|
–
|
1,774
|
||||||
Other assets
|
458
|
24,957
|
||||||
Total assets
|
$
|
249,742
|
$
|
1,585,547
|
||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Demand deposits
|
$
|
–
|
$
|
116,113
|
||||
NOW accounts
|
–
|
185,782
|
||||||
Money market accounts
|
–
|
137,422
|
||||||
Savings deposits
|
–
|
30,639
|
||||||
Time deposits
|
–
|
873,330
|
||||||
Total deposits
|
–
|
1,343,286
|
||||||
Borrowings
|
–
|
121,000
|
||||||
Subordinated debentures
|
19,163
|
34,323
|
||||||
Other liabilities
|
5,715
|
10,250
|
||||||
Total liabilities
|
24,878
|
1,508,859
|
||||||
Shareholders’ Equity
|
||||||||
Preferred stock, $1,000 par value; 100,000 shares authorized; 41,279 shares issued and outstanding (liquidation preference of $41,279) at December 31, 2010
|
–
|
40,418
|
||||||
Common stock, no par value; 300,000,000 shares authorized; 85,802,164 and 12,877,846 shares issued and outstanding
|
218,826
|
145,594
|
||||||
Retained earnings (accumulated deficit)
|
5,267
|
(108,027
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
771
|
(1,297
|
)
|
|||||
Total shareholders’ equity
|
224,864
|
76,688
|
||||||
Total liabilities and shareholders’ equity
|
$
|
249,742
|
$
|
1,585,547
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands except per share data)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Interest income:
|
||||||||||||||
Loans and loan fees
|
$
|
27,521
|
$
|
5,479
|
$
|
68,474
|
$
|
70,178
|
||||||
Investment securities:
|
||||||||||||||
Taxable interest income
|
3,206
|
391
|
7,483
|
9,849
|
||||||||||
Tax-exempt interest income
|
398
|
74
|
1,596
|
3,026
|
||||||||||
Dividends
|
59
|
–
|
80
|
46
|
||||||||||
Federal funds and other interest income
|
257
|
11
|
89
|
42
|
||||||||||
Total interest income
|
31,441
|
5,955
|
77,722
|
83,141
|
||||||||||
Interest expense:
|
||||||||||||||
Deposits
|
4,560
|
1,551
|
21,082
|
28,037
|
||||||||||
Borrowings and subordinated debentures
|
1,968
|
445
|
5,677
|
6,226
|
||||||||||
Total interest expense
|
6,528
|
1,996
|
26,759
|
34,263
|
||||||||||
Net interest income
|
24,913
|
3,959
|
50,963
|
48,878
|
||||||||||
Provision for loan losses
|
1,450
|
40
|
58,545
|
23,064
|
||||||||||
Net interest income (loss) after provision for loan losses
|
23,463
|
3,919
|
(7,582
|
)
|
25,814
|
|||||||||
Noninterest income:
|
||||||||||||||
Service charges and other fees
|
1,355
|
291
|
3,311
|
3,883
|
||||||||||
Bank card services
|
847
|
174
|
2,020
|
1,539
|
||||||||||
Mortgage origination and other loan fees
|
518
|
210
|
1,861
|
1,935
|
||||||||||
Brokerage fees
|
308
|
78
|
963
|
698
|
||||||||||
Bank-owned life insurance
|
134
|
10
|
699
|
1,830
|
||||||||||
Equity income from investment in Capital Bank, NA
|
4,045
|
–
|
–
|
–
|
||||||||||
Other
|
155
|
69
|
840
|
607
|
||||||||||
Securities gains (losses):
|
||||||||||||||
Realized securities gains, net
|
–
|
–
|
5,855
|
173
|
||||||||||
Other-than-temporary impairments
|
–
|
–
|
–
|
(1,082
|
)
|
|||||||||
Less: non-credit portion recognized in other comprehensive income
|
–
|
–
|
–
|
584
|
||||||||||
Total securities gains (losses), net
|
–
|
–
|
5,855
|
(325
|
)
|
|||||||||
Total noninterest income
|
7,362
|
832
|
15,549
|
10,167
|
||||||||||
Noninterest expense:
|
||||||||||||||
Salaries and employee benefits
|
9,525
|
1,977
|
22,675
|
22,112
|
||||||||||
Occupancy
|
2,970
|
548
|
5,906
|
5,630
|
||||||||||
Furniture and equipment
|
1,401
|
275
|
3,183
|
3,155
|
||||||||||
Data processing and telecommunications
|
911
|
180
|
2,092
|
2,317
|
||||||||||
Advertising and public relations
|
325
|
131
|
1,887
|
1,610
|
||||||||||
Office expenses
|
498
|
93
|
1,260
|
1,383
|
||||||||||
Professional fees
|
543
|
190
|
2,514
|
1,488
|
||||||||||
Business development and travel
|
550
|
87
|
1,350
|
1,244
|
||||||||||
Amortization of other intangible assets
|
478
|
62
|
937
|
1,146
|
||||||||||
ORE losses and miscellaneous loan costs
|
1,608
|
176
|
5,006
|
1,646
|
||||||||||
Directors’ fees
|
93
|
68
|
1,061
|
1,418
|
||||||||||
FDIC deposit insurance
|
1,076
|
266
|
3,846
|
2,721
|
||||||||||
Contract termination fees
|
3,955
|
–
|
–
|
–
|
||||||||||
Other
|
1,344
|
102
|
2,592
|
3,940
|
||||||||||
Total noninterest expense
|
25,277
|
4,155
|
54,309
|
49,810
|
||||||||||
Net income (loss) before taxes
|
5,548
|
596
|
(46,342
|
)
|
(13,829
|
)
|
||||||||
Income tax expense (benefit)
|
281
|
–
|
15,124
|
(7,013
|
)
|
|||||||||
Net income (loss)
|
5,267
|
596
|
(61,466
|
)
|
(6,816
|
)
|
||||||||
Dividends and accretion on preferred stock
|
–
|
861
|
2,355
|
2,352
|
||||||||||
Net income (loss) attributable to common shareholders
|
$
|
5,267
|
$
|
(265
|
)
|
$
|
(63,821
|
)
|
$
|
(9,168
|
)
|
|||
Earnings (loss) per common share – basic
|
$
|
0.06
|
$
|
(0.02
|
)
|
$
|
(4.98
|
)
|
$
|
(0.80
|
)
|
|||
Earnings (loss) per common share – diluted
|
$
|
0.06
|
$
|
(0.02
|
)
|
$
|
(4.98
|
)
|
$
|
(0.80
|
)
|
Preferred Stock
|
Common Stock
|
Other Comprehensive
Income
|
Retained Earnings
(Accumulated
|
||||||||||||||||||
Predecessor Company
|
Shares
|
Amount
|
Shares
|
Amount
|
(Loss)
|
Deficit)
|
Total
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
Balance at January 1, 2009
|
41,279
|
$
|
39,839
|
11,238,085
|
$
|
139,209
|
$
|
886
|
$
|
(31,420
|
)
|
$
|
148,514
|
||||||||
Comprehensive loss:
|
|||||||||||||||||||||
Net loss
|
(6,816
|
)
|
(6,816
|
)
|
|||||||||||||||||
Net unrealized gain on securities, net of tax of $3,169
|
5,051
|
5,051
|
|||||||||||||||||||
Net unrealized loss on cash flow hedge, net of tax benefit of $1,215
|
(1,936
|
)
|
(1,936
|
)
|
|||||||||||||||||
Amortization of prior service cost on SERP
|
(46
|
)
|
(46
|
)
|
|||||||||||||||||
Total comprehensive loss
|
(3,747
|
)
|
|||||||||||||||||||
Accretion of preferred stock discount
|
288
|
(288
|
)
|
–
|
|||||||||||||||||
Restricted stock awards
|
16,692
|
107
|
107
|
||||||||||||||||||
Stock option expense
|
50
|
50
|
|||||||||||||||||||
Directors’ deferred compensation
|
93,340
|
543
|
543
|
||||||||||||||||||
Dividends on preferred stock
|
(2,064
|
)
|
(2,064
|
)
|
|||||||||||||||||
Dividends on common stock ($0.32 per share)
|
(3,618
|
)
|
(3,618
|
)
|
|||||||||||||||||
Balance at December 31, 2009
|
41,279
|
$
|
40,127
|
11,348,117
|
$
|
139,909
|
$
|
3,955
|
$
|
(44,206
|
)
|
$
|
139,785
|
||||||||
Comprehensive loss:
|
|||||||||||||||||||||
Net loss
|
(61,466
|
)
|
(61,466
|
)
|
|||||||||||||||||
Net unrealized loss on securities, net of tax benefit of $3,300
|
(5,260
|
)
|
(5,260
|
)
|
|||||||||||||||||
Amortization of prior service cost on SERP
|
8
|
8
|
|||||||||||||||||||
Total comprehensive loss
|
(66,718
|
)
|
|||||||||||||||||||
Accretion of preferred stock discount
|
291
|
(291
|
)
|
–
|
|||||||||||||||||
Issuance of common stock
|
1,468,770
|
5,065
|
5,065
|
||||||||||||||||||
Restricted stock forfeiture
|
(3,508
|
)
|
(10
|
)
|
(10
|
)
|
|||||||||||||||
Stock option expense
|
54
|
54
|
|||||||||||||||||||
Directors’ deferred compensation
|
64,467
|
576
|
576
|
||||||||||||||||||
Dividends on preferred stock
|
(2,064
|
)
|
(2,064
|
)
|
|||||||||||||||||
Balance at December 31, 2010
|
41,279
|
$
|
40,418
|
12,877,846
|
$
|
145,594
|
$
|
(1,297
|
)
|
$
|
(108,027
|
)
|
$
|
76,688
|
|||||||
(continued on next page)
|
Preferred Stock
|
Common Stock
|
Other
Comprehensive
Income
|
Retained
Earnings
(Accumulated
|
||||||||||||||||||
Predecessor Company
|
Shares
|
Amount
|
Shares
|
Amount
|
(Loss)
|
Deficit)
|
Total
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
Balance at January 1, 2011
|
41,279
|
$
|
40,418
|
12,877,846
|
$
|
145,594
|
$
|
(1,297
|
)
|
$
|
(108,027
|
)
|
$
|
76,688
|
|||||||
Comprehensive income:
|
|||||||||||||||||||||
Net income
|
596
|
596
|
|||||||||||||||||||
Net unrealized loss on securities, net of tax benefit of $204
|
(324
|
)
|
(324
|
)
|
|||||||||||||||||
Amortization of prior service cost on SERP
|
1
|
1
|
|||||||||||||||||||
Total comprehensive income
|
273
|
||||||||||||||||||||
Accretion of preferred stock discount
|
24
|
(24
|
)
|
–
|
|||||||||||||||||
Stock option expense
|
5
|
5
|
|||||||||||||||||||
Directors’ deferred compensation
|
35
|
35
|
|||||||||||||||||||
Dividends on preferred stock
|
(172
|
)
|
(172
|
)
|
|||||||||||||||||
Balance at January 28, 2011
|
41,279
|
$
|
40,442
|
12,877,846
|
$
|
145,634
|
$
|
(1,620
|
)
|
$
|
(107,627
|
)
|
$
|
76,829
|
|||||||
Preferred Stock
|
Common Stock
|
Other
Comprehensive
Income
|
Retained
Earnings
(Accumulated
|
||||||||||||||||||
Successor Company
|
Shares
|
Amount
|
Shares
|
Amount
|
(Loss)
|
Deficit)
|
Total
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
Balance at January 29, 2011
|
–
|
$
|
–
|
83,877,846
|
$
|
224,085
|
$
|
–
|
$
|
–
|
$
|
224,085
|
|||||||||
Comprehensive income:
|
|||||||||||||||||||||
Net income
|
5,267
|
5,267
|
|||||||||||||||||||
Net unrealized gain on securities, net of tax of $3,367
|
5,266
|
5,266
|
|||||||||||||||||||
Total comprehensive income
|
10,533
|
||||||||||||||||||||
Issuance of common stock, net of offering costs of $300
|
1,613,165
|
3,814
|
3,814
|
||||||||||||||||||
Stock option expense
|
78
|
78
|
|||||||||||||||||||
Restricted stock forfeiture
|
(1,751
|
)
|
(7
|
)
|
(7
|
)
|
|||||||||||||||
Directors’ deferred compensation
|
312,904
|
–
|
–
|
||||||||||||||||||
Merger of Old Capital Bank into Capital Bank, NA
|
(4,124
|
)
|
(4,495
|
)
|
(8,619
|
)
|
|||||||||||||||
Merger of GreenBank into Capital Bank, NA
|
(5,020
|
)
|
(5,020
|
)
|
|||||||||||||||||
Balance at December 31, 2011
|
–
|
$
|
–
|
85,802,164
|
$
|
218,826
|
$
|
771
|
$
|
5,267
|
$
|
224,864
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Cash flows from operating activities:
|
||||||||||||||
Net income (loss)
|
$
|
5,267
|
$
|
596
|
$
|
(61,466
|
)
|
$
|
(6,816
|
)
|
||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||||
Equity income from investment in Capital Bank, NA
|
(4,045
|
)
|
–
|
–
|
–
|
|||||||||
Accretion of purchased credit-impaired loans
|
(26,262
|
)
|
–
|
–
|
–
|
|||||||||
Amortization/accretion on acquired liabilities, net
|
(3,403
|
)
|
–
|
–
|
–
|
|||||||||
Provision for loan losses
|
1,450
|
40
|
58,545
|
23,064
|
||||||||||
Loss on repurchase of mortgage loans
|
–
|
–
|
–
|
361
|
||||||||||
Amortization of other intangible assets
|
478
|
62
|
937
|
1,146
|
||||||||||
Depreciation
|
1,354
|
240
|
2,629
|
2,893
|
||||||||||
Stock-based compensation
|
146
|
42
|
736
|
702
|
||||||||||
(Gain) loss on sale of securities, net
|
–
|
–
|
(5,855
|
)
|
325
|
|||||||||
Amortization of premium on securities, net
|
695
|
171
|
98
|
180
|
||||||||||
Loss on disposal of premises, equipment and ORE
|
5
|
26
|
444
|
88
|
||||||||||
ORE valuation adjustments
|
74
|
–
|
2,088
|
217
|
||||||||||
Bank-owned life insurance income
|
(134
|
)
|
(10
|
)
|
(699
|
)
|
(378
|
)
|
||||||
Deferred income tax expense (benefit)
|
3,415
|
–
|
15,396
|
(4,708
|
)
|
|||||||||
Net change in:
|
||||||||||||||
Mortgage loans held for sale
|
1,907
|
4,424
|
(6,993
|
)
|
–
|
|||||||||
Accrued interest receivable and other assets
|
(7,659
|
)
|
(1,309
|
)
|
5,070
|
(5,972
|
)
|
|||||||
Accrued interest payable and other liabilities
|
3,024
|
(3,939
|
)
|
(1,279
|
)
|
(220
|
)
|
|||||||
Net cash provided by (used in) operating activities
|
(23,688
|
)
|
343
|
9,651
|
10,882
|
|||||||||
Cash flows from investing activities:
|
||||||||||||||
Net cash paid in Capital Bank merger
|
(42,880
|
)
|
–
|
–
|
–
|
|||||||||
Investment in Capital Bank, NA
|
(16,063
|
)
|
–
|
–
|
–
|
|||||||||
Principal repayments on loans, net of loans originated or acquired
|
13,048
|
14,547
|
68,805
|
(162,132
|
)
|
|||||||||
Purchases of premises and equipment
|
(607
|
)
|
(307
|
)
|
(3,938
|
)
|
(3,326
|
)
|
||||||
Proceeds from sales of premises, equipment and ORE
|
4,545
|
20
|
8,350
|
5,856
|
||||||||||
Proceeds from surrender of bank-owned life insurance
|
–
|
–
|
16,473
|
–
|
||||||||||
Sales (purchases) of FHLB stock
|
1,259
|
–
|
(1,680
|
)
|
(20
|
)
|
||||||||
Purchases of securities – available for sale
|
(138,855
|
)
|
(6,840
|
)
|
(232,579
|
)
|
(31,842
|
)
|
||||||
Proceeds from sales of securities – available for sale
|
–
|
–
|
164,012
|
21,703
|
||||||||||
Proceeds from principal repayments/calls/maturities of securities – available for sale
|
25,761
|
3,936
|
89,021
|
48,947
|
||||||||||
Proceeds from principal repayments/calls/maturities of securities – held to maturity
|
–
|
–
|
853
|
1,503
|
||||||||||
Net cash provided by (used in) investing activities
|
(153,792
|
)
|
11,356
|
109,317
|
(119,481
|
)
|
||||||||
(continued on next page)
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Cash flows from financing activities:
|
||||||||||||||
(Decrease) increase in deposits, net
|
(2,426
|
)
|
(4,960
|
)
|
(34,679
|
)
|
62,651
|
|||||||
Decrease in repurchase agreements, net
|
–
|
–
|
(6,543
|
)
|
(8,467
|
)
|
||||||||
Proceeds from borrowings
|
–
|
–
|
189,000
|
183,000
|
||||||||||
Principal repayments of borrowings
|
(30,000
|
)
|
(5,000
|
)
|
(235,000
|
)
|
(148,000
|
)
|
||||||
Proceeds from issuance of subordinated debentures
|
–
|
–
|
3,393
|
–
|
||||||||||
Repurchase of preferred stock
|
–
|
(41,279
|
)
|
–
|
–
|
|||||||||
Proceeds from CBF Investment
|
–
|
181,050
|
–
|
–
|
||||||||||
Proceeds from issuance of common stock, net of offering costs
|
3,814
|
–
|
5,065
|
–
|
||||||||||
Dividends paid
|
–
|
–
|
(2,972
|
)
|
(5,527
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
(28,612
|
)
|
129,811
|
(81,736
|
)
|
83,657
|
||||||||
Net change in cash and cash equivalents
|
$
|
(206,092
|
)
|
$
|
141,510
|
$
|
37,232
|
$
|
(24,942
|
)
|
||||
Cash and cash equivalents at beginning of year
|
208,255
|
66,745
|
29,513
|
54,455
|
||||||||||
Cash and cash equivalents at end of year
|
$
|
2,163
|
$
|
208,255
|
$
|
66,745
|
$
|
29,513
|
||||||
Supplemental Disclosure of Cash Flow Information
|
||||||||||||||
Noncash investing activities:
|
||||||||||||||
Transfer of noncash assets to Capital Bank, NA
|
$
|
1,419,308
|
$
|
–
|
$
|
–
|
$
|
–
|
||||||
Transfer of liabilities to Capital Bank, NA
|
1,457,413
|
–
|
–
|
–
|
||||||||||
Equity method investment in Capital Bank, NA
|
232,264
|
–
|
–
|
–
|
||||||||||
Transfers of loans and premises to ORE
|
7,573
|
248
|
18,453
|
15,356
|
||||||||||
Transfers of OREO to loans
|
857
|
146
|
–
|
–
|
||||||||||
Transfers of securities from held to maturity to available for sale
|
–
|
–
|
2,822
|
–
|
||||||||||
Capital leases recorded in premises and other liabilities
|
6,618
|
–
|
–
|
–
|
||||||||||
Cash paid for (received from):
|
||||||||||||||
Income taxes
|
$
|
130
|
$
|
–
|
$
|
(2,190
|
)
|
$
|
(4,521
|
)
|
||||
Interest
|
10,706
|
1,531
|
27,219
|
35,364
|
Capital Bank, NA
|
Jun. 30, 2011
to
Dec. 31, 2011
|
|||
(Dollars in thousands)
|
||||
Interest income
|
$
|
137,508
|
||
Interest expense
|
17,810
|
|||
Net interest income
|
119,698
|
|||
Provision for loan losses
|
28,636
|
|||
Noninterest income
|
28,710
|
|||
Noninterest expense
|
97,754
|
|||
Net income
|
$
|
13,984
|
•
|
Held to Maturity – Debt securities that the institution has the positive intent and ability to hold to maturity are classified as held to maturity and reported at amortized cost; or
|
|
•
|
Trading Securities – Debt and equity securities that are bought and held principally for the purpose of selling in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings; or
|
|
•
|
Available for Sale – Debt and equity securities not classified as either held-to-maturity securities or trading securities are classified as available-for-sale securities and reported at fair value, with unrealized gains and losses reported as other comprehensive income, a separate component of shareholders’ equity.
|
•
|
Levels of and trends in delinquencies, impaired loans and classified assets;
|
|
•
|
Levels of and trends in charge-offs and recoveries;
|
|
•
|
Trends in nature, volume and terms of loans;
|
|
•
|
Existence of and changes in portfolio concentrations by product type and geographical location;
|
|
•
|
Changes in national, regional and local economic conditions;
|
|
•
|
Changes in the experience, ability and depth of lending management;
|
|
•
|
Changes in the quality of the loan review system; and
|
|
•
|
The effect of other external factors such as legal and regulatory requirements.
|
•
|
Level 1 – Valuations for assets and liabilities traded in active exchange markets.
|
|
•
|
Level 2 – Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal market for these securities is the secondary institutional markets, and valuations are based on observable market data in those markets.
|
|
•
|
Level 3 – Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands except per share data)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Net loss attributable to common shareholders
|
$
|
5,267
|
$
|
(265
|
)
|
$
|
(63,821
|
)
|
$
|
(9,168
|
)
|
|||
Shares used in the computation of earnings per share:
|
||||||||||||||
Weighted average number of shares outstanding – basic
|
85,649,203
|
13,188,612
|
12,810,905
|
11,470,314
|
||||||||||
Incremental shares from assumed exercise of stock options
|
–
|
–
|
–
|
–
|
||||||||||
Weighted average number of shares outstanding – diluted
|
85,649,203
|
13,188,612
|
12,810,905
|
11,470,314
|
||||||||||
Earnings (loss) per common share – basic
|
$
|
0.06
|
$
|
(0.02
|
)
|
$
|
(4.98
|
)
|
$
|
(0.80
|
)
|
|||
Earnings (loss) per common share – diluted
|
$
|
0.06
|
$
|
(0.02
|
)
|
$
|
(4.98
|
)
|
$
|
(0.80
|
)
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
|||||||||||
Anti-dilutive stock options
|
193,600
|
297,880
|
297,880
|
366,583
|
||||||||||
Anti-dilutive warrants
|
–
|
749,619
|
749,619
|
749,619
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Unrealized gains (losses) on securities – available for sale
|
$
|
8,633
|
$
|
(528
|
)
|
$
|
(8,560
|
)
|
$
|
8,220
|
||||
Unrealized gain (loss) on cash flow hedge
|
–
|
–
|
–
|
(3,151
|
)
|
|||||||||
Amortization of prior service cost on SERP
|
0
|
1
|
8
|
(46
|
)
|
|||||||||
Income tax effect
|
(3,367
|
)
|
204
|
3,300
|
(1,954
|
)
|
||||||||
Other comprehensive income (loss)
|
$
|
5,266
|
$
|
(323
|
)
|
$
|
(5,252
|
)
|
$
|
3,069
|
Successor Company
|
||||||||||
(Dollars in thousands)
|
Originally
Reported
as of
Jan. 28, 2011
|
Measurement
Period
Adjustments
|
Revised
as of
Jan. 28, 2011
|
|||||||
Fair value of assets acquired:
|
||||||||||
Cash and cash equivalents
|
$
|
208,255
|
$
|
–
|
$
|
208,255
|
||||
Investment securities
|
225,336
|
–
|
225,336
|
|||||||
Mortgage loans held for sale
|
2,569
|
–
|
2,569
|
|||||||
Loans
|
1,135,164
|
(30,701
|
)
|
1,104,463
|
||||||
Goodwill
|
30,994
|
19,099
|
50,093
|
|||||||
Other intangible assets
|
5,004
|
–
|
5,004
|
|||||||
Deferred tax asset
|
55,391
|
11,118
|
66,509
|
|||||||
Other assets
|
66,663
|
(613
|
)
|
66,050
|
||||||
Total assets acquired
|
1,729,376
|
(1,097
|
)
|
1,728,279
|
||||||
Fair value of liabilities assumed:
|
||||||||||
Deposits
|
1,351,467
|
–
|
1,351,467
|
|||||||
Borrowings
|
123,837
|
–
|
123,837
|
|||||||
Subordinated debt
|
19,392
|
475
|
19,867
|
|||||||
Other liabilities
|
10,595
|
(1,572
|
)
|
9,023
|
||||||
Total liabilities assumed
|
1,505,291
|
(1,097
|
)
|
1,504,194
|
||||||
Net assets acquired
|
224,085
|
–
|
224,085
|
|||||||
Less: non-controlling interest at fair value
|
(43,785
|
)
|
–
|
(43,785
|
)
|
|||||
180,300
|
–
|
180,300
|
||||||||
Underwriting and legal costs
|
750
|
–
|
750
|
|||||||
Purchase price
|
$
|
181,050
|
$
|
–
|
$
|
181,050
|
Predecessor Company
|
|||||||||||||
December 31, 2010
|
Amortized Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair Value
|
|||||||||
(Dollars in thousands)
|
|||||||||||||
Available for sale:
|
|||||||||||||
U.S. agency obligations
|
$
|
19,003
|
$
|
18
|
$
|
87
|
$
|
18,934
|
|||||
Municipal bonds
|
22,455
|
75
|
1,521
|
21,009
|
|||||||||
Mortgage-backed securities issued by GSEs
|
165,540
|
78
|
195
|
165,423
|
|||||||||
Non-agency mortgage-backed securities
|
6,790
|
39
|
242
|
6,587
|
|||||||||
Other securities
|
3,252
|
–
|
214
|
3,038
|
|||||||||
217,040
|
210
|
2,259
|
214,991
|
||||||||||
Other investments
|
8,301
|
–
|
–
|
8,301
|
|||||||||
Total
|
$
|
225,341
|
$
|
210
|
$
|
2,259
|
$
|
223,292
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Gross realized gains
|
$
|
–
|
$
|
–
|
$
|
5,863
|
$
|
493
|
||||||
Gross realized losses
|
–
|
–
|
(8
|
)
|
(320
|
)
|
||||||||
Net realized gains
|
–
|
–
|
5,855
|
173
|
||||||||||
OTTI recognized on non-agency mortgage-backed securities:
|
||||||||||||||
Total OTTI on non-agency mortgage-backed securities
|
–
|
–
|
–
|
(381
|
)
|
|||||||||
Non-credit portion recognized in other comprehensive income
|
–
|
–
|
–
|
381
|
||||||||||
Credit related OTTI on non-agency mortgage-backed securities recognized in income
|
–
|
–
|
–
|
–
|
||||||||||
OTTI recognized on corporate bonds (in other securities):
|
||||||||||||||
Total OTTI on corporate bonds
|
–
|
–
|
–
|
(701
|
)
|
|||||||||
Non-credit portion recognized in other comprehensive income
|
–
|
–
|
–
|
202
|
||||||||||
Credit related OTTI on corporate bonds recognized in income
|
–
|
–
|
–
|
(498
|
)
|
|||||||||
Total OTTI recognized in income
|
–
|
–
|
–
|
(498
|
)
|
|||||||||
Securities gains (losses), net
|
$
|
–
|
$
|
–
|
$
|
5,855
|
$
|
(325
|
)
|
Predecessor Company
|
|||||||||||||||||||
December 31, 2010
|
Less than 12 Months
|
12 Months or Greater
|
Total
|
||||||||||||||||
(
Dollars in thousands)
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||
Available for sale:
|
|||||||||||||||||||
U.S. agency obligations
|
$
|
8,916
|
$
|
87
|
$
|
–
|
$
|
–
|
$
|
8,916
|
$
|
87
|
|||||||
Municipal bonds
|
14,886
|
1,134
|
2,453
|
387
|
17,339
|
1,521
|
|||||||||||||
Mortgage-backed securities issued by GSEs
|
14,473
|
195
|
–
|
–
|
14,473
|
195
|
|||||||||||||
Non-agency mortgage-backed securities
|
–
|
–
|
4,183
|
242
|
4,183
|
242
|
|||||||||||||
Other securities
|
–
|
–
|
2,536
|
214
|
2,536
|
214
|
|||||||||||||
Total
|
$
|
38,275
|
$
|
1,416
|
$
|
9,172
|
$
|
843
|
$
|
47,447
|
$
|
2,259
|
Predecessor Company
|
|||||||
December 31, 2010
|
Available for Sale
|
||||||
(Dollars in thousands)
|
Amortized Cost
|
Fair Value
|
|||||
Debt securities:
|
|||||||
Due within one year
|
$
|
300
|
$
|
301
|
|||
Due after one year through five years
|
17,882
|
17,904
|
|||||
Due after five years through ten years
|
49,567
|
49,401
|
|||||
Due after ten years
|
147,541
|
145,647
|
|||||
Total debt securities
|
215,290
|
213,253
|
|||||
Equity securities
|
1,750
|
1,738
|
|||||
Total investment securities
|
$
|
217,040
|
$
|
214,991
|
Predecessor
Company
|
||||
(Dollars in thousands)
|
Dec. 31, 2010
|
|||
Commercial real estate:
|
||||
Construction and land development
|
$
|
350,587
|
||
Real estate – non-owner occupied
|
283,943
|
|||
Real estate – owner occupied
|
170,470
|
|||
Total commercial real estate
|
805,000
|
|||
Consumer real estate:
|
||||
Residential mortgage
|
173,777
|
|||
Home equity lines
|
89,178
|
|||
Total consumer real estate
|
262,955
|
|||
Commercial and industrial
|
145,435
|
|||
Consumer
|
6,163
|
|||
Other loans
|
33,742
|
|||
1,253,295
|
||||
Deferred loan fees and origination costs, net
|
1,184
|
|||
$
|
1,254,479
|
(Dollars in thousands)
|
As of
Jan. 28, 2011
|
|||
Contractually required payments
|
$
|
1,318,702
|
||
Nonaccretable difference
|
(125,626
|
)
|
||
Cash flows expected to be collected at acquisition
|
1,193,076
|
|||
Accretable yield
|
(163,630
|
)
|
||
Fair value of acquired loans at acquisition
|
$
|
1,029,446
|
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
|||
Balance, beginning of period
|
$
|
163,630
|
||
New loans purchased
|
–
|
|||
Accretion of income
|
(26,262
|
)
|
||
Reclassifications from nonaccretable difference
|
9,975
|
|||
Merger of Old Capital Bank into Capital Bank, NA
|
(147,343
|
)
|
||
Balance, end of period
|
$
|
–
|
•
|
the estimate of the remaining life of PCI loans which may change the amount of future interest income, and possibly principal, expected to be collected;
|
|
•
|
the estimate of the amount of contractually required principal and interest payments over the estimated life that will not be collected (the nonaccretable difference); and
|
|
•
|
indices for PCI loans with variable rates of interest.
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Balance at beginning of period, predecessor
|
$
|
–
|
$
|
36,061
|
$
|
26,081
|
$
|
14,795
|
||||||
Loans charged off
|
(339
|
)
|
(49
|
)
|
(49,420
|
)
|
(12,197
|
)
|
||||||
Recoveries of loans previously charged off
|
–
|
9
|
855
|
419
|
||||||||||
Net charge-offs
|
(339
|
)
|
(40
|
)
|
(48,565
|
)
|
(11,778
|
)
|
||||||
Provision for loan losses
|
1,450
|
40
|
58,545
|
23,064
|
||||||||||
Merger of Old Capital Bank into Capital Bank, NA
|
(1,111
|
)
|
–
|
–
|
–
|
|||||||||
Balance at the end of period, predecessor
|
–
|
36,061
|
36,061
|
26,081
|
||||||||||
Acquisition accounting adjustment
|
–
|
(36,061
|
)
|
–
|
–
|
|||||||||
Balance at end of period, successor
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
Predecessor Company
|
||||||||||||||||||||||
December 31, 2010
|
CRE –
Non-Owner
Occupied
|
Consumer
Real Estate
|
CRE –
Owner
Occupied
|
Commercial
and
Industrial
|
Consumer
|
Other
|
Total
|
|||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||
Beginning balance
|
$
|
14,987
|
$
|
2,383
|
$
|
2,650
|
$
|
5,536
|
$
|
326
|
$
|
199
|
$
|
26,081
|
||||||||
Charge-offs
|
(33,803
|
)
|
(3,923
|
)
|
(4,417
|
)
|
(6,639
|
)
|
(429
|
)
|
(209
|
)
|
(49,420
|
)
|
||||||||
Recoveries
|
616
|
54
|
48
|
115
|
22
|
–
|
855
|
|||||||||||||||
Provision
|
39,195
|
6,218
|
5,114
|
7,420
|
435
|
163
|
58,545
|
|||||||||||||||
Ending balance – total
|
$
|
20,995
|
$
|
4,732
|
$
|
3,395
|
$
|
6,432
|
$
|
354
|
$
|
153
|
$
|
36,061
|
||||||||
Ending balance – individually evaluated for impairment
|
$
|
212
|
$
|
87
|
$
|
139
|
$
|
89
|
$
|
2
|
$
|
–
|
$
|
529
|
||||||||
Ending balance – collectively evaluated for impairment
|
$
|
20,783
|
$
|
4,645
|
$
|
3,256
|
$
|
6,343
|
$
|
352
|
$
|
153
|
$
|
35,532
|
||||||||
Loans:
|
||||||||||||||||||||||
Ending balance – total
|
$
|
634,530
|
$
|
262,955
|
$
|
170,470
|
$
|
145,435
|
$
|
6,163
|
$
|
33,742
|
$
|
1,253,295
|
||||||||
Ending balance – individually evaluated for impairment
|
$
|
57,227
|
$
|
3,879
|
$
|
8,613
|
$
|
6,013
|
$
|
6
|
$
|
781
|
$
|
76,519
|
||||||||
Ending balance – collectively evaluated for impairment
|
$
|
577,303
|
$
|
259,076
|
$
|
161,857
|
$
|
139,422
|
$
|
6,157
|
$
|
32,961
|
$
|
1,176,776
|
Predecessor Company
|
||||||||||
December 31, 2010
|
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
|||||||
(Dollars in thousands)
|
||||||||||
Impaired loans for which the full loss has been charged-off:
|
||||||||||
Commercial real estate:
|
||||||||||
Construction and land development
|
$
|
53,675
|
$
|
65,918
|
$
|
–
|
||||
Commercial real estate – non-owner occupied
|
2,678
|
3,772
|
–
|
|||||||
Consumer real estate:
|
||||||||||
Residential mortgage
|
3,222
|
4,436
|
–
|
|||||||
Home equity lines
|
236
|
332
|
–
|
|||||||
Commercial real estate – owner occupied
|
8,083
|
10,475
|
–
|
|||||||
Commercial and industrial
|
5,466
|
6,128
|
–
|
|||||||
Other loans
|
781
|
990
|
–
|
|||||||
Total with no related allowance
|
74,141
|
92,051
|
–
|
|||||||
Impaired loans with an allowance recorded:
|
||||||||||
Commercial real estate:
|
||||||||||
Construction and land development
|
874
|
874
|
212
|
|||||||
Consumer real estate:
|
||||||||||
Residential mortgage
|
380
|
380
|
79
|
|||||||
Home equity lines
|
41
|
41
|
8
|
|||||||
Commercial real estate – owner occupied
|
530
|
530
|
139
|
|||||||
Commercial and industrial
|
547
|
565
|
89
|
|||||||
Consumer
|
6
|
6
|
2
|
|||||||
Total with an allowance
|
2,378
|
2,396
|
529
|
|||||||
Total impaired loans:
|
||||||||||
Commercial
|
72,634
|
89,252
|
440
|
|||||||
Consumer
|
3,885
|
5,195
|
89
|
|||||||
Total impaired loans
|
$
|
76,519
|
$
|
94,447
|
$
|
529
|
Predecessor Company
|
||||
(Dollars in thousands)
|
Dec. 31, 2010
|
|||
Nonperforming TDRs:
|
||||
Commercial real estate
|
$
|
10,775
|
||
Consumer real estate
|
808
|
|||
Commercial owner occupied
|
2,271
|
|||
Commercial and industrial
|
106
|
|||
Total nonperforming TDRs
|
13,960
|
|||
Performing TDRs:
|
||||
Commercial real estate
|
3,856
|
|||
Consumer real estate
|
121
|
|||
Commercial owner occupied
|
421
|
|||
Commercial and industrial
|
65
|
|||
Consumer
|
–
|
|||
Total performing TDRs
|
4,463
|
|||
Total TDRs
|
$
|
18,423
|
•
|
Pass
(risk rating 1–6) – These loans ranged from superior quality with minimal credit risk to loans requiring heightened management attention but that are still an acceptable risk and continue to perform as contracted.
|
|
•
|
Special Mention
(risk rating 7) – Loans in this category had potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may have resulted in deterioration of the repayment prospects for the asset or the institution’s credit position at some future date. They contain unfavorable characteristics and were generally undesirable. Loans in this category were currently protected by current sound net worth and paying capacity of the obligor or of the collateral pledged, if any, but were potentially weak and constitute an undue and unwarranted credit risk, but not to the point of a Substandard classification.
|
|
•
|
Substandard
(risk rating 8) – Loans in this category were inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies were not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. A substandard loan normally had one or more well-defined weaknesses that could jeopardize repayment of the debt.
|
|
•
|
Doubtful
(risk rating 9) – For loans in this category, the borrower’s ability to continue repayment was highly unlikely. Full collection based on currently known facts, conditions, and values was highly questionable and improbable. The possibility of loss was extremely high, but because of certain important and specific reasonable pending factors, which work to the bank’s advantage and strengthen the asset in the near term, its classification as loss was deferred until its more exact status may be determined.
|
Commercial Loans
|
|||||||||||||||||||
December 31, 2010
(Predecessor Company)
|
Construction
and Land
Development
|
Non-Owner
Occupied
Real Estate
|
Owner
Occupied
Real Estate
|
Commercial
and
Industrial
|
Other
|
Total
|
|||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Pass
|
$
|
250,557
|
$
|
266,523
|
$
|
154,156
|
$
|
101,674
|
$
|
32,961
|
$
|
805,871
|
|||||||
Special mention
|
20,178
|
12,505
|
2,287
|
20,488
|
–
|
55,458
|
|||||||||||||
Substandard
|
79,852
|
4,610
|
13,967
|
23,266
|
781
|
122,476
|
|||||||||||||
Doubtful
|
–
|
305
|
60
|
7
|
–
|
372
|
|||||||||||||
Total
|
$
|
350,587
|
$
|
283,943
|
$
|
170,470
|
$
|
145,435
|
$
|
33,742
|
$
|
984,177
|
Consumer Loans
|
|||||||||||||
December 31, 2010
(Predecessor Company)
|
Residential
Mortgage
|
Home Equity
Lines
|
Other
Consumer
|
Total
|
|||||||||
(Dollars in thousands)
|
|||||||||||||
Pass
|
$
|
162,002
|
$
|
85,000
|
$
|
5,803
|
$
|
252,805
|
|||||
Special mention
|
5,518
|
1,972
|
188
|
7,678
|
|||||||||
Substandard
|
6,138
|
2,110
|
172
|
8,420
|
|||||||||
Doubtful
|
119
|
96
|
–
|
215
|
|||||||||
Total
|
$
|
173,777
|
$
|
89,178
|
$
|
6,163
|
$
|
269,118
|
Predecessor Company
|
|||||||||||||||||||
December 31, 2010
|
30–59
Days
Past Due
|
60–89
Days
Past Due
|
Over 90 Days
Past Due and
Accruing
|
Nonaccrual
Loans
|
Current
Loans
|
Total
Loans
|
|||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Commercial real estate:
|
|||||||||||||||||||
Construction and land development
|
$
|
6,166
|
$
|
204
|
$
|
–
|
$
|
50,693
|
$
|
293,524
|
$
|
350,587
|
|||||||
Real estate – non-owner occupied
|
509
|
–
|
–
|
2,678
|
280,756
|
283,943
|
|||||||||||||
Real estate – owner occupied
|
3,165
|
–
|
–
|
8,198
|
159,107
|
170,470
|
|||||||||||||
Consumer real estate:
|
|||||||||||||||||||
Residential mortgage
|
2,213
|
329
|
–
|
3,481
|
167,754
|
173,777
|
|||||||||||||
Home equity lines
|
498
|
109
|
–
|
277
|
88,294
|
89,178
|
|||||||||||||
Commercial and industrial
|
175
|
146
|
–
|
5,830
|
139,284
|
145,435
|
|||||||||||||
Consumer
|
4
|
4
|
–
|
6
|
6,149
|
6,163
|
|||||||||||||
Other loans
|
–
|
–
|
–
|
781
|
32,961
|
33,742
|
|||||||||||||
Total
|
$
|
12,730
|
$
|
792
|
$
|
–
|
$
|
71,944
|
$
|
1,167,829
|
$
|
1,253,295
|
Predecessor Company
|
||||
(Dollars in thousands)
|
Dec. 31, 2010
|
|||
Land
|
$
|
6,795
|
||
Buildings and leasehold improvements
|
17,927
|
|||
Furniture and equipment
|
19,163
|
|||
Automobiles
|
265
|
|||
Construction in progress
|
411
|
|||
44,561
|
||||
Less accumulated depreciation and amortization
|
(19,527
|
)
|
||
$
|
25,034
|
Predecessor Company
|
Goodwill
|
Other Intangible Assets
|
|||||||||||
(Dollars in thousands)
|
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||
Balance at January 1, 2009
|
$
|
–
|
$
|
8,414
|
$
|
(4,557
|
)
|
$
|
3,857
|
||||
Amortization expense
|
–
|
–
|
(1,146
|
)
|
(1,146
|
)
|
|||||||
Balance at December 31, 2009
|
–
|
8,414
|
(5,703
|
)
|
2,711
|
||||||||
Amortization expense
|
–
|
–
|
(937
|
)
|
(937
|
)
|
|||||||
Balance at December 31, 2010
|
–
|
8,414
|
(6,640
|
)
|
1,774
|
||||||||
Amortization expense
|
–
|
–
|
(62
|
)
|
(62
|
)
|
|||||||
Balance at January 28, 2011, predecessor
|
$
|
–
|
$
|
8,414
|
$
|
(6,702
|
)
|
$
|
1,712
|
||||
Successor Company
|
Goodwill
|
Other Intangible Assets
|
|||||||||||
(Dollars in thousands)
|
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||
Acquisition accounting adjustment
|
$
|
–
|
$
|
(8,414)
|
$
|
6,702
|
$
|
(1,712)
|
|||||
Balance at January 29, 2011, successor
|
50,093
|
5,004
|
–
|
5,004
|
|||||||||
Amortization expense
|
–
|
–
|
(478
|
)
|
(478
|
)
|
|||||||
Merger of Old Capital Bank into Capital Bank, NA
|
(50,093
|
)
|
(5,004
|
)
|
478
|
(4,526
|
)
|
||||||
Balance at December 31, 2011
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
Predecessor Company
|
|||||||
December 31, 2010
|
Amount
|
Weighted
Average Rate
|
|||||
(Dollars in thousands)
|
|||||||
2011
|
$
|
234,572
|
1.06
|
%
|
|||
2012
|
311,121
|
2.02
|
|||||
2013
|
257,327
|
1.76
|
|||||
2014
|
11,698
|
2.69
|
|||||
2015
|
58,568
|
2.72
|
|||||
Thereafter
|
44
|
2.64
|
|||||
$
|
873,330
|
1.74
|
%
|
Predecessor Company
|
||||||||||||||||
December 31, 2010
|
End of Period
|
Daily Average Balance
|
||||||||||||||
(Dollars in thousands)
|
Balance
|
Weighted
Average
Rate
|
Balance
|
Interest
Rate
|
Maximum
Outstanding at
Any Month End
|
|||||||||||
Securities sold under agreements to repurchase
|
$
|
–
|
–
|
%
|
$
|
1,564
|
0.32
|
%
|
$
|
5,026
|
||||||
Predecessor
Company
|
||||
(Dollars in thousands)
|
Dec. 31, 2010
|
|||
FHLB advances without call options or where call options expired prior to December 31, 2010; fixed interest rates on advances outstanding as of December 31, 2010 ranging from 1.86% to 5.50%; maturity dates on those advances ranging from January 26, 2011 to January 20, 2015
|
$
|
41,000
|
||
FHLB advance with next quarterly call option on February 22, 2011; fixed interest rate of 3.63%; matures on August 21, 2017
|
10,000
|
|||
FHLB overnight borrowings; interest rate of 0.47% as of December 31, 2010, subject to change daily
|
20,000
|
|||
Structured repurchase agreements without call options or where call options expired prior to December 31, 2010; fixed interest rates on advances outstanding as of December 31, 2010 of 3.72% and 3.79%; agreements mature on December 18, 2017
|
20,000
|
|||
Structured repurchase agreements with various forms of call options remaining; fixed interest rates ranging from 3.56% to 4.75%; maturity dates ranging from November 6, 2016 to March 22, 2019
|
30,000
|
|||
Federal Reserve Bank primary credit facility; current interest rate of 0.75% as of December 31, 2010
|
–
|
|||
$
|
121,000
|
Predecessor Company
|
|||||||
December 31, 2010
|
Balance
|
Weighted
Average Rate
|
|||||
(Dollars in thousands)
|
|||||||
2011
|
$
|
51,000
|
3.21
|
%
|
|||
2012
|
–
|
–
|
|||||
2013
|
3,000
|
1.86
|
|||||
2014
|
3,000
|
2.43
|
|||||
2015
|
4,000
|
2.92
|
|||||
Thereafter
|
60,000
|
3.99
|
|||||
$
|
121,000
|
3.54
|
%
|
Predecessor Company
|
|||||||
December 31, 2010
|
Lease Payments
|
Sublease Receipts
|
|||||
(Dollars in thousands)
|
|||||||
2011
|
$
|
4,112
|
$
|
383
|
|||
2012
|
4,058
|
295
|
|||||
2013
|
3,919
|
242
|
|||||
2014
|
3,817
|
240
|
|||||
2015
|
3,623
|
247
|
|||||
Thereafter
|
29,747
|
62
|
|||||
$
|
49,276
|
$
|
1,469
|
Predecessor Company
|
2011
|
|||
(Dollars in thousands)
|
||||
Balance as of January 1, 2011
|
$
|
86,970
|
||
Advances
|
55
|
|||
Repayments
|
(11,150
|
)
|
||
Reconstitution of Board of Directors in connection with CBF Investment
|
(63,709
|
)
|
||
Balance as of January 28, 2011
|
$
|
12,166
|
||
Successor Company
|
2011
|
|||
(Dollars in thousands)
|
||||
Advances
|
$
|
487
|
||
Repayments
|
(744
|
)
|
||
Merger of Old Capital Bank into Capital Bank, NA
|
(11,909
|
)
|
||
Balance as of December 31, 2011
|
$
|
–
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||||||||||||||
Period of Jan. 29
to Dec. 31, 2011
|
Period of Jan. 1
to Jan. 28, 2011
|
Year Ended
Dec. 31, 2010
|
Year Ended
Dec. 31, 2009
|
|||||||||||||||||||||||
Shares
|
WAEP
|
Shares
|
WAEP
|
Shares
|
WAEP
|
Shares
|
WAEP
|
|||||||||||||||||||
Outstanding options, beginning
of period
|
297,880
|
$
|
12.11
|
297,880
|
$
|
12.11
|
366,583
|
$
|
11.76
|
377,083
|
$
|
11.71
|
||||||||||||||
Granted
|
–
|
–
|
–
|
–
|
19,250
|
4.38
|
–
|
–
|
||||||||||||||||||
Exercised
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||
Forfeited and expired
|
(104,280
|
)
|
10.26
|
–
|
–
|
(87,953
|
)
|
8.93
|
(10,500
|
)
|
10.09
|
|||||||||||||||
Outstanding options, end of period
|
193,600
|
$
|
13.11
|
297,880
|
$
|
12.11
|
297,880
|
$
|
12.11
|
366,583
|
$
|
11.76
|
||||||||||||||
Options exercisable at end of period
|
180,000
|
$
|
13.59
|
226,430
|
$
|
13.53
|
226,430
|
$
|
13.53
|
285,983
|
$
|
12.33
|
Exercise Price
|
Number
Outstanding
|
Weighted Average
Remaining Contractual
Life in Years
|
Number
Exercisable
|
Intrinsic
Value
|
|||||||||
$3.85 – $6.00
|
59,850
|
7.39
|
47,850
|
$
|
–
|
||||||||
$6.01 – $9.00
|
–
|
–
|
–
|
–
|
|||||||||
$9.01 – $12.00
|
2,500
|
6.15
|
2,500
|
–
|
|||||||||
$12.01 – $15.00
|
16,000
|
5.76
|
14,400
|
–
|
|||||||||
$15.01 – $18.00
|
64,000
|
3.10
|
64,000
|
–
|
|||||||||
$18.01 – $18.37
|
51,250
|
2.99
|
51,250
|
–
|
|||||||||
193,600
|
4.66
|
180,000
|
$
|
–
|
Assumptions
|
2011
|
2010
|
2009
|
||||||
Dividend yield
|
–
|
–
|
–
|
||||||
Expected volatility
|
–
|
33.0%
|
–
|
||||||
Risk-free interest rate
|
–
|
3.1%
|
–
|
||||||
Expected life
|
–
|
7 years
|
–
|
Shares
|
Weighted Avg.
Grant Date
Fair Value
|
||||||
Nonvested at beginning of period
|
11,700
|
$
|
6.00
|
||||
Granted
|
–
|
–
|
|||||
Vested
|
(11,700
|
)
|
6.00
|
||||
Nonvested at end of period
|
–
|
$
|
–
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Current income tax expense (benefit)
|
$
|
(3,134
|
)
|
–
|
$
|
(272
|
)
|
$
|
(2,305
|
)
|
||||
Deferred income tax expense (benefit)
|
3,415
|
–
|
15,396
|
(4,708
|
)
|
|||||||||
Total income tax expense (benefit)
|
$
|
281
|
–
|
$
|
15,124
|
$
|
(7,013
|
)
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
Amount Computed
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
(Dollars in thousands)
|
||||||||||||||
Tax expense (benefit) at statutory rate on net income (loss) before taxes
|
$
|
1,942
|
$
|
203
|
$
|
(15,756
|
)
|
$
|
(4,702
|
)
|
||||
State taxes, net of federal benefit
|
100
|
41
|
(1,894
|
)
|
(558
|
)
|
||||||||
Increase (reduction) in taxes resulting from:
|
||||||||||||||
Valuation allowance on deferred tax asset
|
–
|
(187
|
)
|
31,821
|
–
|
|||||||||
Tax exempt interest
|
(296
|
)
|
(57
|
)
|
(945
|
)
|
(1,184
|
)
|
||||||
Nontaxable BOLI income
|
–
|
(3
|
)
|
(238
|
)
|
(622
|
)
|
|||||||
Taxable income on BOLI surrender
|
–
|
–
|
1,981
|
–
|
||||||||||
Equity income from investment in Capital Bank, NA
|
(1,416
|
)
|
–
|
–
|
–
|
|||||||||
Other, net
|
(49
|
) |
3
|
155
|
53
|
|||||||||
$
|
281
|
$
|
–
|
$
|
15,124
|
$
|
(7,013
|
)
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
Percent of Pretax Income (Loss)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Tax expense (benefit) at statutory rate on net income (loss) before taxes
|
35.00
|
%
|
34.00
|
%
|
34.00
|
%
|
34.00
|
%
|
||||||
State taxes, net of federal benefit
|
1.81
|
6.90
|
4.09
|
4.03
|
||||||||||
Increase (reduction) in taxes resulting from:
|
||||||||||||||
Valuation allowance on deferred tax asset
|
–
|
(31.33
|
)
|
(68.67
|
)
|
–
|
||||||||
Tax exempt interest
|
(5.34
|
)
|
(9.58
|
)
|
2.04
|
8.56
|
||||||||
Nontaxable BOLI income
|
–
|
(0.58
|
)
|
0.51
|
4.50
|
|||||||||
Taxable income on BOLI surrender
|
–
|
–
|
(4.27
|
)
|
–
|
|||||||||
Equity income from investment in Capital Bank, NA
|
(25.52
|
)
|
–
|
(4.27
|
)
|
–
|
||||||||
Other, net
|
(0.88
|
) |
0.59
|
(0.34
|
)
|
(0.38
|
)
|
|||||||
5.07
|
%
|
–
|
(32.64
|
)%
|
50.71
|
%
|
Successor Company
|
Predecessor
Company
|
|||||||
(Dollars in thousands)
|
Dec. 31, 2011
|
Dec. 31, 2010
|
||||||
Deferred tax assets:
|
||||||||
Allowance for loan losses
|
$
|
–
|
$
|
14,143
|
||||
ORE valuation adjustments
|
–
|
666
|
||||||
Intangible assets
|
–
|
1,808
|
||||||
Net unrealized loss on investment securities
|
–
|
790
|
||||||
Deferred compensation
|
–
|
2,632
|
||||||
Deferred rent
|
–
|
335
|
||||||
Nonaccrual interest
|
–
|
323
|
||||||
Deferred gain on sale-leaseback
|
–
|
318
|
||||||
Stock offering costs
|
–
|
–
|
||||||
Net operating loss carryforwards
|
–
|
11,587
|
||||||
AMT credit carryforward
|
–
|
1,831
|
||||||
Other
|
–
|
304
|
||||||
Gross deferred tax assets before valuation allowance
|
–
|
34,737
|
||||||
Less: valuation allowance
|
–
|
(31,821
|
)
|
|||||
Gross deferred tax assets after valuation allowance
|
–
|
2,916
|
||||||
Deferred tax liabilities:
|
||||||||
Purchase accounting adjustment
|
(5,215
|
)
|
–
|
|||||
Depreciation
|
–
|
1,202
|
||||||
FHLB stock dividends
|
–
|
343
|
||||||
Net unrealized gain on investment securities
|
–
|
–
|
||||||
Deferred loan origination costs
|
–
|
719
|
||||||
Prepaid expenses
|
–
|
515
|
||||||
Other
|
–
|
137
|
||||||
Gross deferred tax liabilities
|
(5,215
|
)
|
2,916
|
|||||
Net deferred tax asset
|
$
|
(5,215
|
)
|
$
|
–
|
Predecessor Company
|
||||
(Dollars in thousands)
|
Dec. 31, 2010
|
|||
Commitments to extend credit
|
$
|
175,318
|
||
Standby letters of credit
|
10,285
|
|||
Total commitments
|
$
|
185,603
|
Predecessor Company
|
|||||||||||||
December 31, 2010
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
|||||||||
(Dollars in thousands)
|
|||||||||||||
Investment securities – available for sale:
|
|||||||||||||
U.S. agency obligations
|
$
|
–
|
$
|
18,934
|
$
|
–
|
$
|
18,934
|
|||||
Municipal bonds
|
–
|
21,009
|
–
|
21,009
|
|||||||||
Mortgage-backed securities issued by GSEs
|
–
|
165,423
|
–
|
165,423
|
|||||||||
Non-agency mortgage-backed securities
|
–
|
6,587
|
–
|
6,587
|
|||||||||
Other securities
|
1,738
|
–
|
1,300
|
3,038
|
|||||||||
Total
|
$
|
1,738
|
$
|
211,953
|
$
|
1,300
|
$
|
214,991
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Balance at beginning of period
|
$
|
1,107
|
$
|
1,300
|
$
|
1,300
|
$
|
2,000
|
||||||
Total unrealized losses included in:
|
||||||||||||||
Net income (loss)
|
–
|
–
|
–
|
(498
|
)
|
|||||||||
Other comprehensive income (loss)
|
–
|
(193
|
)
|
–
|
(202
|
)
|
||||||||
Purchases, sales and issuances, net
|
–
|
–
|
–
|
–
|
||||||||||
Transfers into Level 3
|
–
|
–
|
–
|
–
|
||||||||||
Merger of Old Capital Bank into Capital Bank, NA
|
(1,107
|
)
|
–
|
–
|
–
|
|||||||||
Balance at end of period
|
$
|
–
|
$
|
1,107
|
$
|
1,300
|
$
|
1,300
|
Predecessor Company
|
|||||||||||||
December 31, 2010
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
|||||||||
(Dollars in thousands)
|
|||||||||||||
Impaired loans
|
$
|
–
|
$
|
61,006
|
$
|
14,985
|
$
|
75,990
|
|||||
Other real estate
|
–
|
18,334
|
–
|
18,334
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Dec. 31, 2011
|
Dec. 31, 2010
|
||||||||||||
Carrying
Amount
|
Estimated
Fair Value
|
Carrying
Amount
|
Estimated
Fair Value
|
|||||||||||
Financial Assets:
|
||||||||||||||
Cash and cash equivalents
|
$
|
2,163
|
$
|
2,163
|
$
|
66,745
|
$
|
66,745
|
||||||
Investment securities
|
–
|
–
|
223,292
|
223,292
|
||||||||||
Mortgage loans held for sale
|
–
|
–
|
6,993
|
6,993
|
||||||||||
Loans
|
–
|
–
|
1,218,418
|
1,146,256
|
||||||||||
Accrued interest receivable
|
11
|
11
|
5,158
|
5,158
|
||||||||||
Financial Liabilities:
|
||||||||||||||
Non-maturity deposits
|
$
|
–
|
$
|
–
|
$
|
469,956
|
$
|
469,956
|
||||||
Time deposits
|
–
|
–
|
873,330
|
885,105
|
||||||||||
Borrowings
|
–
|
–
|
121,000
|
126,787
|
||||||||||
Subordinated debentures
|
19,163
|
22,205
|
34,323
|
19,164
|
||||||||||
Accrued interest payable
|
73
|
73
|
1,363
|
1,363
|
||||||||||
Unrecognized financial instruments:
|
||||||||||||||
Commitments to extend credit
|
$
|
–
|
$
|
–
|
$
|
175,318
|
$
|
167,817
|
||||||
Standby letters of credit
|
–
|
–
|
10,285
|
10,285
|
Warrant Assumptions
|
December 12, 2008
|
||
Dividend yield
|
4.4%
|
||
Expected volatility
|
26.4%
|
||
Risk-free interest rate
|
2.6%
|
||
Expected life
|
10 years
|
Successor Company
|
|||||||||||||||||||
Minimum Requirements To Be:
|
|||||||||||||||||||
December 31, 2011
|
Actual
|
Adequately Capitalized
|
Well Capitalized
|
||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||
Capital Bank Corporation:
|
|||||||||||||||||||
Total capital (to risk-weighted assets)
|
$
|
244,027
|
98.39
|
%
|
$
|
19,841
|
8.00
|
%
|
n/a
|
n/a
|
|||||||||
Tier I capital (to risk-weighted assets)
|
240,437
|
96.95
|
9,920
|
4.00
|
n/a
|
n/a
|
|||||||||||||
Tier I capital (to average assets)
|
240,437
|
96.56
|
9,960
|
4.00
|
n/a
|
n/a
|
|||||||||||||
Capital Bank, NA:
|
|||||||||||||||||||
Total capital (to risk-weighted assets)
|
$
|
687,971
|
16.67
|
%
|
$
|
330,201
|
8.00
|
%
|
$
|
412,752
|
10.00
|
||||||||
Tier I capital (to risk-weighted assets)
|
649,523
|
15.74
|
165,101
|
4.00
|
247,651
|
6.00
|
|||||||||||||
Tier I capital (to average assets)
|
649,523
|
10.38
|
250,180
|
4.00
|
312,725
|
5.00
|
|||||||||||||
Predecessor Company
|
|||||||||||||||||||
Minimum Requirements To Be:
|
|||||||||||||||||||
December 31, 2010
|
Actual
|
Adequately Capitalized
|
Well Capitalized
|
||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||
Capital Bank Corporation:
|
|||||||||||||||||||
Total capital (to risk-weighted assets)
|
$
|
126,280
|
9.59
|
%
|
$
|
105,289
|
8.00
|
%
|
n/a
|
n/a
|
|||||||||
Tier I capital (to risk-weighted assets)
|
106,186
|
8.07
|
52,644
|
4.00
|
n/a
|
n/a
|
|||||||||||||
Tier I capital (to average assets)
|
106,186
|
6.45
|
65,858
|
4.00
|
n/a
|
n/a
|
|||||||||||||
Old Capital Bank
|
|||||||||||||||||||
Total capital (to risk-weighted assets)
|
$
|
124,841
|
9.50
|
%
|
$
|
105,112
|
8.00
|
%
|
$
|
131,391
|
10.00
|
%
|
|||||||
Tier I capital (to risk-weighted assets)
|
104,774
|
7.97
|
52,556
|
4.00
|
78,834
|
6.00
|
|||||||||||||
Tier I capital (to average assets)
|
104,774
|
6.37
|
65,821
|
4.00
|
82,276
|
5.00
|
Successor
Company
|
Predecessor
Company
|
|||||||
(Dollars in thousands)
|
Dec. 31, 2011
|
Dec. 31, 2010
|
||||||
Assets:
|
||||||||
Cash
|
$
|
2,163
|
$
|
492
|
||||
Investment in and advance to Capital Bank, NA
|
243,728
|
–
|
||||||
Equity investment in subsidiary
|
–
|
105,278
|
||||||
Note receivable due from subsidiary
|
3,393
|
3,393
|
||||||
Other assets
|
458
|
2,178
|
||||||
Total assets
|
$
|
249,742
|
$
|
111,341
|
||||
Liabilities:
|
||||||||
Subordinated debt
|
$
|
19,163
|
$
|
34,323
|
||||
Dividends payable
|
–
|
258
|
||||||
Other liabilities
|
5,715
|
72
|
||||||
Total liabilities
|
24,878
|
34,653
|
||||||
Shareholders’ equity
|
224,864
|
76,688
|
||||||
Total liabilities and shareholders’ equity
|
$
|
249,742
|
$
|
111,341
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Dividends from wholly-owned subsidiaries
|
$
|
–
|
$
|
–
|
$
|
3,548
|
$
|
6,409
|
||||||
Undistributed net income (loss) of subsidiaries
|
2,050
|
662
|
(63,065
|
)
|
(11,245
|
)
|
||||||||
Equity income from investment in Capital Bank, NA
|
4,045
|
–
|
–
|
–
|
||||||||||
Interest income
|
337
|
43
|
299
|
46
|
||||||||||
Interest expense
|
1,327
|
101
|
1,140
|
1,072
|
||||||||||
Other expense
|
285
|
8
|
88
|
1,974
|
||||||||||
Net income (loss) before income taxes
|
4,820
|
596
|
(60,446
|
)
|
(7,836
|
)
|
||||||||
Income tax expense (benefit)
|
(447
|
)
|
–
|
1,020
|
(1,020
|
)
|
||||||||
Net loss
|
$
|
5,267
|
$
|
596
|
$
|
(61,466
|
)
|
$
|
(6,816
|
)
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||
(Dollars in thousands)
|
Jan. 29, 2011
to
Dec. 31, 2011
|
Jan. 1, 2011
to
Jan. 28, 2011
|
Year
Ended
Dec. 31, 2010
|
Year
Ended
Dec. 31, 2009
|
||||||||||
Operating activities:
|
||||||||||||||
Net income (loss)
|
$
|
5,267
|
$
|
596
|
$
|
(61,466
|
)
|
$
|
(6,816
|
)
|
||||
Equity in undistributed net (income) loss of subsidiaries
|
(2,050
|
)
|
(662
|
)
|
63,065
|
11,245
|
||||||||
Equity income from investment in Capital Bank, NA
|
(4,045
|
)
|
–
|
–
|
–
|
|||||||||
Net change in other assets and liabilities
|
119
|
34
|
93
|
1,591
|
||||||||||
Net cash provided by (used in) operating activities
|
(709
|
)
|
(32
|
)
|
1,692
|
6,020
|
||||||||
Investing activities:
|
||||||||||||||
Payments for equity investments in subsidiary
|
(182,563
|
)
|
41,279
|
(5,065
|
)
|
–
|
||||||||
Payment for note receivable due from subsidiary
|
–
|
–
|
(3,393
|
)
|
–
|
|||||||||
Net cash provided by (used in) investing activities
|
(182,563
|
)
|
41,279
|
(8,458
|
)
|
–
|
||||||||
Financing activities:
|
||||||||||||||
Proceeds from issuance of subordinated debt
|
–
|
–
|
3,393
|
–
|
||||||||||
Proceeds from issuance of preferred stock, net of issuance costs
|
–
|
–
|
–
|
–
|
||||||||||
Proceeds from issuance of common stock
|
3,885
|
40
|
5,314
|
700
|
||||||||||
Payments to repurchase common stock
|
–
|
–
|
–
|
–
|
||||||||||
Proceeds from CBF Investment
|
–
|
139,771
|
–
|
–
|
||||||||||
Dividends paid
|
–
|
–
|
(2,972
|
)
|
(5,527
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
3,855
|
139,811
|
5,735
|
(4,827
|
)
|
|||||||||
Net change in cash and cash equivalents
|
(179,387
|
)
|
181,058
|
(1,031
|
)
|
1,193
|
||||||||
Cash and cash equivalents, beginning of year
|
181,550
|
492
|
1,523
|
330
|
||||||||||
Cash and cash equivalents, end of year
|
$
|
2,163
|
$
|
181,550
|
$
|
492
|
$
|
1,523
|
Results of Operations
|
Successor
Company
|
Predecessor
Company
|
|||||||||||||||
(Dollars in thousands except per share data)
|
Three Months
Ended
Dec. 31, 2011
|
Three Months
Ended
Sep. 30, 2011
|
Three Months
Ended
Jun. 30, 2011
|
Jan. 29, 2011
to
Mar. 31, 2011
|
Jan.1, 2011
to
Jan. 28, 2011
|
||||||||||||
2011
|
|||||||||||||||||
Net interest income (loss)
|
$
|
(277
|
)
|
$
|
(270
|
)
|
$
|
15,439
|
$
|
10,021
|
$
|
3,959
|
|||||
Provision for loan losses
|
–
|
–
|
1,283
|
167
|
40
|
||||||||||||
Noninterest income
|
1,762
|
2,283
|
2,065
|
1,252
|
832
|
||||||||||||
Noninterest expense
|
175
|
76
|
12,797
|
12,229
|
4,155
|
||||||||||||
Net income (loss) before taxes
|
1,310
|
1,937
|
3,424
|
(1,123
|
)
|
596
|
|||||||||||
Income tax expense (benefit)
|
(168
|
)
|
(117
|
)
|
1,115
|
(549
|
)
|
–
|
|||||||||
Net income (loss)
|
1,478
|
2,054
|
2,309
|
(574
|
)
|
596
|
|||||||||||
Dividends and accretion on preferred stock
|
–
|
–
|
–
|
–
|
861
|
||||||||||||
Net income (loss) attributable to common shareholders
|
$
|
1,478
|
$
|
2,054
|
$
|
2,309
|
$
|
(574
|
)
|
$
|
(265
|
)
|
|||||
Earnings (loss) per share – basic
|
$
|
0.02
|
$
|
0.02
|
$
|
0.03
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
|||||
Earnings (loss) per share – diluted
|
$
|
0.02
|
$
|
0.02
|
$
|
0.03
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
Predecessor Company
|
|||||||||||||
Three Months Ended
|
|||||||||||||
(Dollars in thousands except per share data)
|
December 31
|
September 30
|
June 30
|
March 31
|
|||||||||
2010
|
|||||||||||||
Net interest income
|
$
|
12,287
|
$
|
13,382
|
$
|
12,744
|
$
|
12,550
|
|||||
Provision for loan losses
|
20,011
|
6,763
|
20,037
|
11,734
|
|||||||||
Noninterest income
|
8,004
|
2,500
|
2,514
|
2,531
|
|||||||||
Noninterest expense
|
15,129
|
14,210
|
12,380
|
12,590
|
|||||||||
Net loss before taxes
|
(14,849
|
)
|
(5,091
|
)
|
(17,159
|
)
|
(9,243
|
)
|
|||||
Income tax expense (benefit)
|
18,634
|
3,975
|
(3,576
|
)
|
(3,909
|
)
|
|||||||
Net loss
|
(33,483
|
)
|
(9,066
|
)
|
(13,583
|
)
|
(5,334
|
)
|
|||||
Dividends and accretion on preferred stock
|
589
|
588
|
589
|
589
|
|||||||||
Net loss attributable to common shareholders
|
$
|
(34,072
|
)
|
$
|
(9,654
|
)
|
$
|
(14,172
|
)
|
$
|
(5,923
|
)
|
|
Earnings (loss) per share – basic
|
$
|
(2.59
|
)
|
$
|
(0.74
|
)
|
$
|
(1.09
|
)
|
$
|
(0.49
|
)
|
|
Earnings (loss) per share – diluted
|
$
|
(2.59
|
)
|
$
|
(0.74
|
)
|
$
|
(1.09
|
)
|
$
|
(0.49
|
)
|
(a)(1)
|
Financial Statements
. The financial statements and information listed below are included in this report in Part II, Item 8:
|
•
|
Consolidated Balance Sheets as of December 31, 2011 (Successor) and December 31, 2010 (Predecessor)
|
|
•
|
Consolidated Statements of Operations for the Period of January 29, 2011 to December 31, 2011 (Successor), the Period of January 1, 2011 to January 28, 2011 (Predecessor), and the Years Ended December 31, 2010 and 2009 (Predecessor)
|
|
•
|
Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income (Loss) for the Period of January 29, 2011 to December 31, 2011 (Successor), the Period of January 1, 2011 to January 28, 2011 (Predecessor), and the Years Ended December 31, 2010 and 2009 (Predecessor)
|
|
•
|
Consolidated Statements of Cash Flows for the Period of January 29, 2011 to December 31, 2011 (Successor), the Period of January 1, 2011 to January 28, 2011 (Predecessor), and the Years Ended December 31, 2010 and 2009 (Predecessor)
|
|
•
|
Notes to Consolidated Financial Statements
|
|
•
|
Reports of Independent Registered Public Accounting Firm
|
(a)(2)
|
Financial Statement Schedules
. All applicable financial statement schedules required under Regulation S-X and pursuant
to Industry Guide 3 under the Securities Act have been included in the Notes to the Consolidated Financial Statements or in Part II Item 7.
|
(a)(3)
|
Exhibits.
The exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index immediately following the signature pages to this report.
|
CAPITAL BANK CORPORATION
|
|||
By:
|
/s/ Christopher G. Marshall
|
||
Christopher G. Marshall
|
|||
Chief Financial Officer
|
Signature
|
Title
|
||
/s/
R. Eugene Taylor
|
President, Chief Executive Officer
|
||
R. Eugene Taylor
|
and Chairman of the Board
|
||
(Principal Executive Officer)
|
|||
/s/
Christopher G. Marshall
|
Executive Vice President, Chief Financial Officer
|
||
Christopher G. Marshall
|
and Director
|
||
(Principal Financial Officer and Principal
|
|||
Accounting Officer)
|
|||
/s/
R. Bruce Singletary
|
Executive Vice President, Chief Risk Officer
|
||
R. Bruce Singletary
|
and Director
|
||
/s/
Charles F. Atkins
|
Director
|
||
Charles F. Atkins
|
|||
/s/
Peter N. Foss
|
Director
|
||
Peter N. Foss
|
|||
/s/
William A. Hodges
|
Director
|
||
William A. Hodges
|
|||
/s/
Oscar A. Keller, III
|
Director
|
||
Oscar A. Keller, III
|
Exhibit No.
|
Description
|
|
2.01
|
Merger Agreement, dated June 29, 2005, by and among Capital Bank Corporation and 1st State Bancorp, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 29, 2005)
|
|
2.02
|
List of Schedules Omitted from Merger Agreement included as Exhibit 2.1 above (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 29, 2005)
|
|
2.03
|
Agreement and Plan of Merger by and between North American Financial Holdings, Inc. and Capital Bank Corporation, dated September 1, 2011 (incorporated by reference to Exhibit 2.3 to North American Financial Holdings, Inc.’s Registration Statement on Form S-4 (File No. 333-176796) filed with the SEC on September 12, 2011)
|
|
2.04
|
Purchase and Assumption Agreement, dated as of July 16, 2010, among the Federal Deposit Insurance Corporation, Receiver of First National Bank of the South, Spartanburg, South Carolina, the Federal Deposit Insurance Corporation and NAFH National Bank (Single Family Shared-Loss Agreement and Commercial Shared-Loss Agreement included as Exhibits 4.15A and 4.15B thereto, respectively) (incorporated by reference to Exhibit 2.4 to North American Financial Holdings, Inc.’s Registration Statement on Form S-4 (File No. 333-176796) filed with the SEC on September 12, 2011)
|
|
2.05
|
Purchase and Assumption Agreement, dated as of July 16, 2010, among the Federal Deposit Insurance Corporation, Receiver of Metro Bank of Dade County, Miami, Florida, the Federal Deposit Insurance Corporation and NAFH National Bank (Single Family Shared-Loss Agreement and Commercial Shared-Loss Agreement included as Exhibits 4.15A and 4.15B thereto, respectively) (incorporated by reference to Exhibit 2.5 to North American Financial Holdings, Inc.’s Registration Statement on Form S-4 (File No. 333-176796) filed with the SEC on September 12, 2011)
|
|
2.06
|
Purchase and Assumption Agreement, dated as of July 16, 2010, among the Federal Deposit Insurance Corporation, Receiver of Turnberry Bank, Aventura, Florida, the Federal Deposit Insurance Corporation and NAFH National Bank (Single Family Shared-Loss Agreement and Commercial Shared-Loss Agreement included as Exhibits 4.15A and 4.15B thereto, respectively) (incorporated by reference to Exhibit 2.6 to North American Financial Holdings, Inc.’s Registration Statement on Form S-4 (File No. 333-176796) filed with the SEC on September 12, 2011)
|
|
2.07
|
Agreement of Merger of TIB Bank with and into NAFH National Bank, by and between NAFH National Bank and TIB Bank, dated as of April 27, 2011(Exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted exhibit will be furnished supplementally to the Securities and Exchange Commission upon request) (incorporated by reference to Exhibit 2.7 to North American Financial Holdings, Inc.’s Registration Statement on Form S-4 (File No. 333-176796) filed with the SEC on September 12, 2011)
|
|
2.08
|
Agreement of Merger of Capital Bank with and into NAFH National Bank, by and between NAFH National Bank and Capital Bank, dated as of June 30, 2011(Exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted exhibit will be furnished supplementally to the Securities and Exchange Commission upon request) (incorporated by reference to Exhibit 2.8 to North American Financial Holdings, Inc.’s Registration Statement on Form S-4 (File No. 333-176796) filed with the SEC on September 12, 2011)
|
|
2.09
|
Agreement and Plan of Merger of GreenBank with and into Capital Bank, National Association, by and between GreenBank and Capital Bank, National Association, dated as of September 7, 2011 (Exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted exhibit will be furnished supplementally to the Securities and Exchange Commission upon request) (incorporated by reference to Exhibit 2.9 to North American Financial Holdings, Inc.’s Registration Statement on Form S-4 (File No. 333-176796) filed with the SEC on September 12, 2011)
|
Exhibit No.
|
Description
|
|
3.01
|
Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 15, 2011)
|
|
3.02
|
Bylaws of the Company, as amended to date (incorporated by reference to Exhibit 3.02 to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2002)
|
|
4.01
|
Specimen Common Stock Certificate of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-4 (File No. 333-65853) filed with the SEC on October 19, 1998, as amended on November 10, 1998, December 21, 1998 and February 8, 1999)
|
|
4.02
|
In accordance with Item 601(b) (4) (iii) (A) of Regulation S-K, certain instruments respecting long-term debt of the registrant have been omitted but will be furnished to the SEC upon request.
|
|
4.03
|
Specimen Series A Preferred Stock Certificate of the Company (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2008)
|
|
4.04
|
Warrant to Purchase up to 749,619 Shares of Common Stock (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2008)
|
|
10.01
|
Equity Incentive Plan (incorporated by reference to Exhibit 10.02 to the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2003)*
|
|
10.02
|
Form of Stock Award Agreement under the Capital Bank Corporation Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 28, 2007)*
|
|
10.03
|
Form of Incentive Stock Option Agreement under the Capital Bank Corporation Equity Incentive Plan (incorporated by reference to Exhibit 99.3 to the Company’s Registration Statement on Form S-8 (File No. 333-160699) filed with the SEC on July 20, 2009)*
|
|
10.04
|
Amended and Restated Deferred Compensation Plan for Outside Directors (incorporated by reference from Appendix A to the Company’s Proxy Statement for Annual Meeting held on May 26, 2005)*
|
|
10.05
|
Amended and Restated Deferred Compensation Plan for Outside Directors, effective November 20, 2008 (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2009)*
|
|
10.06
|
Capital Bank Defined Benefit Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 27, 2005)*
|
|
10.07
|
Amended and Restated Capital Bank Defined Benefit Supplemental Executive Retirement Plan, effective December 18, 2008 (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2009)*
|
|
10.08
|
Capital Bank Supplemental Retirement Plan for Directors (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 27, 2005)*
|
|
10.09
|
Amended and Restated Capital Bank Supplemental Retirement Plan for Directors, effective December 18, 2008 (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2009)*
|
|
10.10
|
Amended and Restated Employment Agreement, dated September 17, 2008, by and between Capital Bank Corporation, Capital Bank and B. Grant Yarber (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 22, 2008)*
|
|
Exhibit No.
|
Description
|
|
10.11
|
Employment Agreement, dated January 31, 2008, by and between Michael R. Moore and Capital Bank Corporation (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 31, 2008)*
|
|
10.12
|
Employment Agreement, dated January 25, 2008, by and between David C. Morgan and Capital Bank Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 31, 2008)*
|
|
10.13
|
Amended and Restated Employment Agreement, dated September 17, 2008, by and between Capital Bank Corporation, Capital Bank and Mark Redmond (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 22, 2008)*
|
|
10.14
|
Letter Agreement, dated November 18, 2008, by and between Capital Bank and Ralph J. Edwards (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2010)*
|
|
10.15
|
Lease Agreement, dated November 16, 1999, between Crabtree Park, LLC and the Company (incorporated by reference to Exhibit 10.02 to the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2000)
|
|
10.16
|
Lease Agreement, dated November 1, 2005, by and between Capital Bank Corporation and 333 Ventures, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 28, 2005)
|
|
10.17
|
Agreement, dated November 2001, between Fiserv Solutions, Inc. and the Company (incorporated by reference to Exhibit 10.08 to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2002)
|
|
10.18
|
Letter Agreement, dated December 12, 2008, including Securities Purchase Agreement—Standard Terms incorporated by reference therein, by and between the Company and the United States Department of the Treasury (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2008)
|
|
10.19
|
Form of Waiver with Senior Executive Officers (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2008)
|
|
10.20
|
Form of Letter Agreement Limiting Executive Compensation with Senior Executive Officers (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2008)
|
|
10.21
|
Summary of Material Terms of the Capital Bank Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2008 filed with the SEC on May 8, 2008)*
|
|
10.22
|
Purchase and Assumption Agreement, dated September 25, 2008, by and between Capital Bank, a wholly-owned subsidiary of Capital Bank Corporation, and Omni National Bank (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2008 filed with the SEC on November 7, 2008)
|
|
10.22
|
Real Estate Purchase Agreement, dated October 6, 2008, by and between Capital Bank, a wholly-owned subsidiary of Capital Bank Corporation, Michael R. Moore and Viola V. Moore (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 9, 2008)
|
|
10.23
|
Letter of Intent, dated December 13, 2009, between Patriot Financial Partners, L.P., Patriot Financial Partners Parallel, L.P. and Capital Bank Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 14, 2009)
|
Exhibit No.
|
Description
|
|
10.24
|
Investment Agreement, dated November 3, 2010, among Capital Bank Corporation, Capital Bank and North American Financial Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 4, 2010)
|
|
10.25
|
First Amendment to Investment Agreement, dated January 14, 2011, among Capital Bank Corporation, Capital Bank and North American Financial Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 18, 2011)
|
|
10.26
|
Amendment to Amended and Restated Employment Agreement, dated January 14, 2011, among Capital Bank, Capital Bank Corporation, and B. Grant Yarber (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 18, 2011)*
|
|
10.27
|
Amendment to Employment Agreement, dated January 14, 2011, among Capital Bank, Capital Bank Corporation, and Michael R. Moore (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on January 18, 2011)*
|
|
10.28
|
Amendment to Employment Agreement, dated January 14, 2011, among Capital Bank, Capital Bank Corporation, and David C. Morgan (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on January 18, 2011)*
|
|
10.29
|
Amendment to Amended and Restated Employment Agreement, dated January 14, 2011, among Capital Bank, Capital Bank Corporation, and Mark Redmond (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on January 18, 2011)*
|
|
10.30
|
Contingent Value Rights Agreement dated January 28, 2011, by Capital Bank Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 1, 2011)
|
|
10.31
|
Registration Rights Agreement dated January 28, 2011, by and between Capital Bank Corporation and North American Financial Holdings, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 1, 2011)
|
|
10.32
|
Form of Indemnification Agreement by and between Capital Bank Corporation and its directors and certain officers (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 1, 2011)
|
|
10.33
|
Form of Indemnification Agreement by and between Capital Bank and its directors and certain officers (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on February 1, 2011)
|
|
10.34
|
Amendment to Capital Bank Defined Benefit Supplemental Retirement Plan (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on February 1, 2011)*
|
|
21.01
|
Subsidiaries of the Registrant**
|
|
23.01
|
Consent of Independent Registered Public Accounting Firm**
|
|
23.02
|
Consent of Independent Registered Public Accounting Firm**
|
|
31.01
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
|
|
31.02
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
|
Exhibit No.
|
Description
|
|
32.01
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002. [This exhibit is being furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by that act, be deemed to be incorporated by reference into any document or filed herewith for purposes of liability under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, as the case may be.]**
|
|
32.02
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002. [This exhibit is being furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by that act, be deemed to be incorporated by reference into any document or filed herewith for purposes of liability under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, as the case may be.]**
|
|
101.INS
|
XBRL Instance Document
***
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
***
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
***
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
***
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
***
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
***
|
|
*
|
Represents a management contract or compensatory plan or arrangement
|
**
|
Filed herewith
|
***
|
Users of this data are advised that pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
1 Year Capital Bank Corp. (MM) Chart |
1 Month Capital Bank Corp. (MM) Chart |
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