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Capital Bank Financial Corp. Reports Fourth-Quarter Net Income Of $0.10 And Core Net Income Of $0.17 Per Diluted Share

About Capital Bank Financial Corp.

Capital Bank Financial Corp. is a national bank holding company, formed in 2009 to create a premier regional banking franchise in the southeastern United States. CBF is the parent of Capital Bank N.A., a national banking association with approximately $7.3 billion in total assets as of December 31, 2012 and 164 full-service banking offices throughout Florida, North Carolina, South Carolina, Tennessee and Virginia. To learn more about Capital Bank, N.A., please visit www.capitalbank-us.com .

CAPITAL BANK FINANCIAL CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)  
  For the Quarter Ended
  December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012 December 31, 2011
Interest and dividend income $76,122 $69,438 $72,893 $74,141 $74,341
Interest expense 10,115 9,104 9,548 10,289 10,761
NET INTEREST INCOME 66,007 60,334 63,345 63,852 63,580
           
Provision for loan losses 4,370 5,771 6,608 5,376 16,790
           
NON-INTEREST INCOME:          
Service charges on deposit accounts  6,630 5,058 6,332 5,991 6,064
Debit card income 2,724 2,442 2,589 2,761 2,847
Fees on mortgage loans sold 2,074 1,612 1,205 1,103 942
Investment advisory and trust fees 156 85 142 152 196
FDIC indemnification asset accretion 317 850 (164) 322 2,428
Investment securities gains, net 9 4,918 933 2,759 1,780
Other-than-temporary impairment losses on investments:          
Gross impairment loss -- -- (38) (6) --
Less: Impairments recognized in other comprehensive income -- -- -- -- --
Net impairment losses recognized in earnings -- -- (38) (6) --
           
Other income 3,434 5,482 1,180 1,741 1,755
Total non-interest income 15,344 20,447 12,179 14,823 16,012
           
NON-INTEREST EXPENSE:          
Salaries & employee benefits 28,113 25,202 25,535 30,144 26,237
Net occupancy expense 11,031 9,355 9,584 9,290 9,016
Foreclosed asset related expense 9,222 9,649 5,150 4,207 4,348
Conversion and merger related expenses 604 3,894 1,757 1,288 1,092
Professional fees 3,426 2,761 3,025 3,727 3,034
Loan workout expenses 1,753 2,308 1,830 1,615 1,211
Loss on extinguishment of debt -- 2,946 -- 321 --
Legal settlement expense -- 1,755 97 900 --
Impairment of intangible asset 202 -- -- -- 2,872
Other expense 14,003 11,680 11,656 11,741 12,616
Total non-interest expense 68,354 69,550 58,634 63,233 60,426
           
Income before income taxes 8,627 5,460 10,282 10,066 2,376
Income tax (benefit) expense 3,295 (32,385) 3,909 3,903 983
NET INCOME BEFORE ATTRIBUTION OF NONCONTROLLING INTERESTS 5,332 37,845 6,373 6,163 1,393
Net income attributable to non-controlling interests -- 2,762 862 910 378
Net income attributable to Capital Bank Financial Corp. $5,332 $35,083 $5,511 $5,253 $1,015
           
 BASIC EARNINGS PER COMMON SHARE: $0.10 $0.76 $0.12 $0.12 $0.02
 DILUTED EARNINGS PER COMMON SHARE: $0.10 $0.75 $0.12 $0.12 $0.02
 
CAPITAL BANK FINANCIAL CORP
CONSOLIDATED BALANCE SHEETS  
( Dollars and shares in thousands, except per share data)  
(Unaudited)
       
  December 31, 2012 September 30, 2012 December 31, 2011
Assets      
Cash and due from banks $ 142,361 $ 94,406 $ 87,637
Interest-bearing deposits with banks 592,375 367,796 611,137
Federal funds sold 138 -- 11,189
       
Total cash and cash equivalents 734,874 462,202 709,963
       
Trading securities -- -- 637
Investment securities held to maturity -- -- --
Investment securities available for sale 1,006,744 982,309 826,274
       
Loans held for sale 11,276 12,928 20,746
       
Loans, net of deferred loan costs and fees 4,679,290 4,059,284 4,281,717
Less: Allowance for loan losses 54,896 51,587 34,749
       
Loans, net 4,624,394 4,007,697 4,246,968
       
Other real estate owned 154,267 144,621 168,781
Indemnification asset 49,417 56,544 66,282
Receivable from FDIC 8,486 9,294 13,315
Premises and equipment, net 198,457 165,028 159,730
Goodwill 147,863 115,960 115,960
Intangible assets, net 28,636 23,370 26,692
Deferred income tax asset 198,424 170,293 140,047
Accrued interest receivable and other assets 132,875 86,932 90,985
       
Total Assets $ 7,295,713 $ 6,237,178 $ 6,586,380
       
Liabilities and Shareholders' Equity      
Liabilities      
Deposits:      
Noninterest-bearing demand $ 895,274 $ 721,785 $ 683,258
Negotiable order of withdrawal accounts 1,288,742 1,045,177 1,087,760
Money market 1,125,967 867,238 868,375
Savings 492,187 424,785 296,355
Time deposits 2,071,003 1,788,271 2,189,436
       
Total deposits 5,873,173 4,847,256 5,125,184
       
Federal Home Loan Bank advances 1,460 -- 221,018
Short-term borrowings 41,508 41,694 54,533
Long-term borrowings 180,430 140,766 140,101
Accrued interest payable and other liabilities 43,111 57,331 54,634
       
Total liabilities 6,139,682 5,087,047 5,595,470
       
Shareholders' equity      
Preferred stock $0.01 par value: 50,000 shares authorized, 0 shares issued
Common stock—Class A $0.01 par value: 200,000 shares authorized, 33,025, 32,646 and 20,028 shares issued and outstanding, respectively 330 326 200
Common stock—Class B $0.01 par value: 200,000 shares authorized, 22,821, 23,198 and 26,122 shares issued and outstanding, respectively 228 232 261
Additional paid in capital 1,076,798 1,073,073 890,627
Retained earnings 69,328 63,997 18,150
Accumulated other comprehensive income 9,347 12,503 7,167
Noncontrolling interest -- -- 74,505
       
Total shareholders' equity 1,156,031 1,150,131 990,910
       
Total Liabilities and Shareholders' Equity $ 7,295,713 $ 6,237,178 $ 6,586,380
 
CAPITAL BANK FINANCIAL CORP.
(In thousands)
(Unaudited)
       
  As of As of As of
Loans December 31, 2012 September 30, 2012 December 31, 2011
       
Non-owner occupied commercial real estate $895,187 $818,171 $903,914
Other commercial construction and land 405,481 332,519 423,932
Multifamily commercial real estate 85,020 69,954 98,207
1-4 family residential construction and land 82,124 66,460 85,978
Total commercial real estate 1,467,812 1,287,104 1,512,031
       
Owner occupied commercial real estate 1,059,469 949,887 902,816
Commercial and industrial loans 658,328 518,386 467,047
Total commercial 1,717,797 1,468,273 1,369,863
       
1-4 family residential 836,112 737,179 818,547
Home equity loans 430,667 351,731 383,768
Other consumer loans 137,157 130,935 123,121
Total consumer 1,403,936 1,219,845 1,325,436
       
Other 101,021 96,990 95,133
       
Total loans $4,690,566 $4,072,212 $4,302,463
       
Deposits      
       
Noninterest-bearing demand  $895,274 $721,785 $683,258
Negotiable order of withdrawal accounts  1,288,742 1,045,177 1,087,760
Money market  1,125,967 867,238 868,375
Savings  492,187 424,785 296,355
Time deposits  2,071,003 1,788,271 2,189,436
Total deposits $5,873,173 $4,847,256 $5,125,184
 
CAPITAL BANK FINANCIAL CORP.
(Dollars and shares in thousands, except per share data)
(Unaudited)  
  As of or for the Quarter Ended
  December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012 December 31, 2011
Net loan charge-offs (recoveries) $1,060 $(344) $1,744 $(483) $1,024
Allowance for loan losses $54,896 $51,587 $45,472 $40,608 $34,749
Allowance for loan losses/ total loans 1.17% 1.27% 1.08% 0.96% 0.81%
Non-accrual loans $13,980 $11,192 $12,544 $7,021 $5,875
Acquired impaired loans >90 days past due and still accruing $352,700 $326,453 $337,692 $348,185 $376,633
Annualized net charge-offs/average loans 0.09% N/A 0.17% N/A 0.14%
           
Total interest-earning assets $6,328,902 $5,459,668 $5,520,236 $5,637,008 $5,789,911
Other real estate owned $154,267 $144,621 $158,235 $169,433 $168,781
Goodwill and intangibles, net of accumulated amortization $176,499 $139,330 $140,367 $141,551 $142,652
Tax equivalent net interest margin 4.11% 4.45% 4.60% 4.50% 4.33%
Efficiency ratio 84.02% 86.10% 77.64% 80.37% 75.92%
Average diluted common shares outstanding 55,401 46,738 45,632 45,478 45,531
End of quarter common shares outstanding 55,846 55,844 46,457 46,457 46,150
Total equity $1,156,031 $1,150,131 $1,017,683 $1,001,135 $990,910
Book value per common share $20.70 $20.60 $20.26 $19.93 $19.86
Tangible book value per common share $17.74 $18.26 $17.69 $17.35 $17.25
Tier 1 capital to average assets - Capital Bank, N.A. 11.7% 12.0% 11.4% 10.8% 10.4%
Tier 1 capital to risk weighted assets – Capital Bank, N.A. 17.1% 17.5% 16.4% 16.1% 15.8%
Total capital to risk weighted assets – Capital Bank, N.A. 18.3% 18.8% 17.6% 17.2% 16.7%
  Total assets $7,295,713 $6,237,178 $6,303,884 $6,453,216 $6,586,380
 
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS    
(Dollars in thousands)    
(Unaudited)    
       
  Quarter Ended December 31, 2012 Quarter Ended September 30, 2012  
  Average Balances Interest* Yield* Average Balances Interest* Yield*  
Loans $4,742,452 $72,004 6.04% $4,120,374 $65,031 6.28%  
Investments 1,074,700 3,470 1.28% 982,750 4,025 1.63%  
Interest bearing deposits 562,937 371 0.26% 280,164 181 0.26%  
Federal Home Loan Bank stock 41,204 537 5.18% 39,224 460 4.67%  
Total interest earning assets 6,421,293 76,382 4.73% 5,422,512 69,697 5.11%  
Non-interest earning assets 930,396     776,340      
Total assets $7,351,689     $6,198,852      
               
Interest bearing liabilities:              
Time $2,199,407 $5,281 0.96% $1,857,122 $5,341 1.14%  
Money market 1,104,390 913 0.33% 876,891 758 0.34%  
NOW 1,246,897 791 0.25% 1,044,506 636 0.24%  
Savings 467,009 343 0.29% 399,300 288 0.29%  
Total interest-bearing deposits 5,017,703 7,328 0.58% 4,177,819 7,023 0.67%  
Short-term borrowings and FHLB advances 45,971 16 0.14% 80,336 130 0.64%  
Long-term borrowings 179,282 2,771 6.15% 135,893 1,951 5.71%  
Total interest bearing liabilities 5,242,956 10,115 0.77% 4,394,048 9,104 0.82%  
               
Non-interest bearing deposits 892,615     722,987      
Other liabilities 63,010     50,587      
Shareholders' equity 1,153,108     1,031,230      
Total liabilities and shareholders' equity $7,351,689     $6,198,852      
               
Net interest income and spread   $66,267 3.97%   $60,593 4.29%  
               
Net interest margin     4.11%     4.45%  
               
               
_______ * Presented on a fully tax equivalent basis  
 
CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS  
(Dollars in thousands)  
(Unaudited)  
     
  Quarter Ended December 31, 2012 Quarter Ended December 31, 2011
  Average Balances Interest* Yield* Average Balances Interest* Yield*
Loans $4,742,452 $72,004 6.04% $4,325,052 $69,232 6.35%
Investments 1,074,700 3,470 1.28% 777,893 4,615 2.35%
Interest bearing deposits 562,937 371 0.26% 720,512 530 0.29%
Federal Home Loan Bank stock 41,204 537 5.18% 38,797 371 3.79%
Total interest earning assets 6,421,293 76,382 4.73% 5,862,254 74,748 5.06%
Non-interest earning assets 930,396     791,396    
Total assets $7,351,689     $6,653,650    
             
Interest bearing liabilities:            
Time $2,199,407 $5,281 0.96% $2,289,104 $5,692 0.99%
Money market 1,104,390 913 0.33% 858,127 1,328 0.61%
NOW 1,246,897 791 0.25% 1,067,332 932 0.35%
Savings 467,009 343 0.29% 292,496 284 0.39%
Total interest-bearing deposits 5,017,703 7,328 0.58% 4,507,059 8,236 0.72%
Short-term borrowings and FHLB advances 45,971 16 0.14% 299,833 645 0.85%
Long-term borrowings 179,282 2,771 6.15% 134,600 1,879 5.54%
Total interest bearing liabilities 5,242,956 10,115 0.77% 4,941,492 10,760 0.86%
             
Non-interest bearing deposits 892,615     681,608    
Other liabilities 63,010     35,840    
Shareholders' equity 1,153,108     994,710    
Total liabilities and shareholders' equity $7,351,689     $6,653,650    
             
Net interest income and spread   $66,267 3.97%   $63,988 4.20%
             
Net interest margin     4.11%     4.33%
             
             
_______ * Presented on a fully tax equivalent basis
 
CAPITAL BANK FINANCIAL CORP.
YEAR TO DATE AVERAGE BALANCES AND YIELDS  
(Dollars In thousands)  
(Unaudited)    
       
  Year Ended December 31, 2012 Year Ended December 31, 2011  
  Average Balances Interest* Yield* Average Balances Interest* Yield*  
Loans $4,332,782 $271,993 6.28% $3,298,499 $205,867 6.24%  
Investments 1,078,025 19,054 1.77% 777,802 20,346 2.62%  
Interest bearing deposits 341,242 846 0.25% 659,220 2,328 0.35%  
Federal Home Loan Bank stock 39,285 1,830 4.66% 32,134 758 2.36%  
Total interest earning assets 5,791,334 293,723 5.07% 4,767,655 229,299 4.81%  
Non-interest earning assets 825,014     593,470      
Total assets $6,616,348     $5,361,125      
               
Interest bearing liabilities:              
Time $2,039,301 $21,423 1.05% $2,032,034 $21,296 1.05%  
Money market 945,432 3,970 0.42% 595,910 3,974 0.67%  
NOW 1,110,878 2,943 0.26% 614,627 2,509 0.41%  
Savings 384,104 1,174 0.31% 203,031 925 0.46%  
Total interest-bearing deposits 4,479,715 29,510 0.66% 3,445,602 28,704 0.83%  
Short-term borrowings and FHLB advances 118,772 953 0.80% 317,962 2,652 0.83%  
Long-term borrowings 146,477 8,594 5.87% 102,288 5,236 5.12%  
Total interest bearing liabilities 4,744,964 39,057 0.82% 3,865,852 36,592 0.95%  
               
Non-interest bearing deposits 772,404     502,732      
Other liabilities 50,421     34,841      
Shareholders' equity 1,048,559     957,700      
Total liabilities and shareholders' equity $6,616,348     $5,361,125      
               
Net interest income and spread   $254,666 4.25%   $192,707 3.86%  
               
Net interest margin     4.40%     4.04%  
               
               
_______ * Presented on a fully tax equivalent basis  
 
RECONCILIATION OF NON-GAAP MEASURES
         
CORE NET INCOME        
(Dollars in millions)        
         
  Pre Tax For the Quarter Ended  31-Dec-12 Tax effected For the Quarter Ended  31-Dec-12 Pre Tax For the Quarter Ended  30-Sep-12 Tax effected For the Quarter Ended  30-Sep-12
         
Net income $5.3 $5.3 $37.8 $37.8
         
Adjustments        
Non-Interest Income        
         
Security gains*  --   --  (4.9) (3.0)
Insurance settlement gain*  --  -- (1.8) (1.1)
Non-Interest Expense        
         
Non-cash equity compensation* 3.8 2.3 4.2 2.6
         
Conversion and severance expense* 2.4 1.5 3.4 2.0
         
Legal and merger   0.1  0.1 1.5 1.5
         
Insurance settlement expense* -- -- 1.8 1.1
         
Loss on extinguishment of debt*  --   --  2.9 1.8
         
Impairment of intangible* 0.2 0.1  --   -- 
Taxes        
         
Tax benefit  --   --  (34.0) (34.0)
         
Tax effect of adjustments* (2.5)  N/A  (2.2)  N/A 
         
Core Net Income $9.3 $9.3 $8.7 $8.7
         
*Tax effected at an income tax rate of 39%        
TANGIBLE BOOK VALUE           
(Dollars in thousands, except per share data)          
  December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012 December 31, 2011
Total shareholders' equity $1,156,031 $1,150,131 $1,017,683 $1,001,135 $990,910
Less: Noncontrolling interest -- -- (76,610) (75,134) (74,505)
Less: CBF proportional share of goodwill, core deposit intangibles, net of taxes** (165,354) (130,234) (119,097) (119,753) (120,367)
Tangible book value $990,677 $1,019,897 $821,976 $806,248 $796,038
Common shares outstanding 55,846 55,844 46,457 46,457 46,150
Tangible book value per share*** $17.74 $18.26 $17.69 $17.35 $17.25
         
**Proportional share is calculated based upon our ownership percentage of TIB Financial, Capital Bank Corp. and Green Bankshares at each respective period.
***Tangible book value is equal to book value less goodwill and core deposit intangibles, net of related deferred tax liabilities.  
CONTACT: Kenneth A. Posner
         Chief of Investment Analytics
         Phone: (704) 554-5901
         E-mail: Kposner@cbfcorp.com

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