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North American Financial Holdings Agrees To Invest $181 Million In Capital Bank

RALEIGH, N.C., Nov. 4, 2010 /PRNewswire-FirstCall/ -- Capital Bank Corporation (Nasdaq: CBKN) (the "Company"), the parent company of Capital Bank, today announced that North American Financial Holdings, Inc. ("NAFH") agreed to invest approximately $181 million in the Company through the purchase of the Company's common stock.  The transaction will result in NAFH owning approximately 85% of the Company's common stock.

This transaction will allow Capital Bank to continue to serve its customers' complete banking needs while supporting NAFH's planned expansion throughout the Southeast.  R. Eugene Taylor, NAFH's CEO, and Christopher G. Marshall, NAFH's CFO, will be added to the management team as the Company's CEO and CFO and members of the Company's Board of Directors upon closing of the investment transaction.  B. Grant Yarber and Michael R. Moore are expected to remain in senior executive roles at Capital Bank.  The Company's Board of Directors will be reconstituted with a combination of two existing members and new NAFH-designated Board members.  

"We are thrilled to have NAFH invest such a significant amount of capital in Capital Bank Corporation," said Yarber.  "We strongly believe that this is indicative of the value of our franchise and the markets that we enjoy.  This capital injection will allow Capital Bank to move forward providing expanded opportunities for our customers, our employees, and our shareholders."

"Capital Bank has a great history of serving the markets where it operates in North Carolina," said Taylor.  "We are proud to partner with Capital Bank to further develop its potential in these very strong markets and capitalize on the synergies with our four recent bank acquisitions."

Pursuant to the investment agreement, and subject to receipt of all necessary regulatory approvals, shareholder approval, and certain other customary closing conditions, NAFH will acquire shares of the Company's common stock at a price of $2.55 per share. Provisions of the agreement include:
  • The issuance of contingent value rights ("CVRs") to existing shareholders prior to closing that would entitle such shareholders to receive up to $0.75 in cash per CVR at the end of a five-year period based on the credit performance of Capital Bank's existing loan portfolio;
  • A closing condition requiring the repurchase or redemption of the Company's preferred stock and warrant held by the U.S. Department of the Treasury (the "Treasury") through the Company's participation in TARP, subject to the Company approaching the Treasury with a repurchase proposal and reaching an agreement with the Treasury;
  • A rights offering by the Company to its legacy shareholders to acquire up to 5 million shares of the Company's common stock at $2.55 per share; and
  • NAFH's right to conduct a tender offer at any time to purchase up to 5.25 million shares of the Company's common stock at a price not less than $2.55 per share.

Wachtell, Lipton, Rosen & Katz served as legal advisor to NAFH.  McColl Partners, LLC and The Orr Group, LLC served as financial advisors and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. served as legal advisor to Capital Bank Corporation.  

About NAFH

North American Financial Holdings, Inc. is a national bank holding company that was incorporated in the state of Delaware in 2009.  NAFH has raised approximately $900 million of equity capital, which it intends to invest in undercapitalized banks with the goal of establishing a strongly capitalized, high performance regional bank.  NAFH has previously invested in TIB Financial Corp., MetroBank of Dade Country, Turnberry Bank and First National Bank of the South.

The management team of NAFH includes:

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