SOURCE: Capital Bank Corporation

Capital Bank Corporation

August 08, 2012 23:42 ET

Capital Bank Corporation Announces Financial Results for the Second Quarter of 2012

RALEIGH, NC--(Marketwire - Aug 8, 2012) - Capital Bank Corporation (the "Company") (NASDAQ: CBKN), a majority-owned subsidiary of Capital Bank Financial Corp. ("CBF," formerly known as North American Financial Holdings, Inc.), today reported financial results for the second quarter of 2012. Operating and financial highlights include the following:

  • Net income totaled $2.6 million, or $0.03 per share, in the second quarter of 2012 and totaled $5.4 million, or $0.06 per share, in the six months ended June 30, 2012;

  • The Company held a 26% ownership interest in Capital Bank, NA, which has $6.3 billion in assets and operates 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia; and

  • The Company increased the equity investment balance in Capital Bank, NA by $2.9 million based on its equity in Capital Bank, NA's net income and increased the equity investment balance by $1.5 million based on its equity in Capital Bank, NA's other comprehensive income in the second quarter of 2012.

"Our team has been working hard in planning for the pending acquisition of Southern Community Financial Corp. While shareholder and regulatory approvals are still pending, Southern Community will expand the Bank's franchise throughout North Carolina, where we see significant growth opportunities. Our recent renegotiation of the investment agreement to change the consideration mix to 100% cash represents our continued commitment to this strategic complement to our organization and eliminates obstacles on the road to a successful merger," stated Gene Taylor, Chairman and Chief Executive Officer of the Company and Capital Bank.

"Our strongest quarter to date for organic loan production, successes in resolution of problem assets and continued aggressive deposit repricing resulted in continued improvement in the Bank's loan mix, net interest margin and profitability. The consolidation of certain duplicative functions during the second quarter is expected to result in further improvement of our efficiency ratio and our overall returns," commented Chris Marshall, Chief Financial Officer of the Company and Capital Bank.

Equity Method Investment in Capital Bank, NA

On June 30, 2011, Capital Bank, formerly a wholly-owned subsidiary of the Company ("Old Capital Bank"), merged with and into NAFH National Bank, a national banking association, with NAFH National Bank as the surviving entity (the "Bank Merger"). In connection with the Bank Merger, NAFH National Bank changed its name to Capital Bank, NA. On September 7, 2011, CBF acquired a controlling interest in Green Bankshares and merged its banking subsidiary, GreenBank, with and into Capital Bank, NA. Following the GreenBank merger, Capital Bank, NA is now owned by the Company, CBF, TIB Financial Corp. ("TIB Financial") and Green Bankshares. CBF is the owner of approximately 83% of the Company's common stock, approximately 94% of TIB Financial's common stock and approximately 90% of Green Bankshares' common stock. Previously, on April 29, 2011, Capital Bank, NA merged with TIB Bank, then a wholly-owned subsidiary of TIB Financial.

The Bank Merger occurred pursuant to the terms of an Agreement of Merger entered into by and between Old Capital Bank and Capital Bank, NA, dated as of June 30, 2011. In the Bank Merger, each share of Old Capital Bank common stock was converted into the right to receive shares of Capital Bank, NA common stock based on each entity's relative tangible book value on March 31, 2011. Following the GreenBank merger, the Company now owns approximately 26% of Capital Bank, NA, with CBF having a direct ownership of 19%, TIB Financial owning 21%, and Green Bankshares owning the remaining 34%.

The Bank Merger, the preceding merger of TIB Bank and Capital Bank, NA, and the succeeding merger of GreenBank and Capital Bank, NA were restructuring transactions between commonly-controlled entities. At the time of the Bank Merger, due to the deconsolidation of Old Capital Bank, the balance of accumulated other comprehensive income was reclassified to common stock within shareholders' equity. Immediately following the Bank Merger, on June 30, 2011, CBF, the Company and TIB Financial made cash contributions of additional capital to Capital Bank, NA of $4.7 million, $6.1 million and $5.2 million, respectively, in proportion to their respective ownership interests in Capital Bank, NA. On September 30, 2011, the Company made a $10.0 million contribution of additional capital to Capital Bank, NA in exchange for additional shares of Capital Bank, NA. These capital contributions were made to provide additional capital support for the general business operations of Capital Bank, NA. As of June 30, 2012, Capital Bank, NA operated 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia and had total assets of $6.3 billion, total deposits of $5.1 billion and shareholders' equity of $966.5 million.

The Company reports its investment in Capital Bank, NA on the Consolidated Balance Sheet as an equity method investment in that entity. As of June 30, 2012, the Company's investment in Capital Bank, NA totaled $250.6 million, which reflected the Company's pro rata ownership of Capital Bank, NA's total shareholders' equity. The Company also had an advance to Capital Bank, NA totaling $3.4 million as of June 30, 2012. In the second quarter of 2012, the Company increased the equity investment balance by $2.9 million based on its equity in Capital Bank, NA's net income and increased the equity investment balance by $1.5 million based on its equity in Capital Bank, NA's other comprehensive income.

In the six months ended June 30, 2012, the Company increased the equity investment balance by $6.0 million based on its equity in Capital Bank, NA's net income and increased the equity investment balance by $921 thousand based on its equity in Capital Bank, NA's other comprehensive income.

The following table presents summarized financial information for the Company's equity method investee, Capital Bank, NA, for each period presented:

         
         
         
Capital Bank, NA   Three Months
Ended
Jun. 30, 2012
  Six Months
Ended
Jun. 30, 2012
(Dollars in thousands)            
             
Interest income   $ 72,893   $ 147,025
Interest expense     8,000     16,725
Net interest income     64,893     130,300
Provision for loan losses     6,608     11,984
Noninterest income     12,298     26,912
Noninterest expense     52,799     108,017
Net income     11,326     23,234
             
             
             

Potential Merger of the Company and CBF

On September 1, 2011, the Boards of Directors of CBF and the Company approved and adopted a merger agreement. The merger agreement provides for the merger, following the receipt of shareholder approval by the Company's shareholders (including CBF), of the Company with and into CBF, with CBF continuing as the surviving entity. In the merger, each share of the Company's common stock issued and outstanding immediately prior to the completion of the merger, except for shares for which appraisal rights are properly exercised and certain shares held by CBF or the Company, will be converted into the right to receive 0.1354 of a share of CBF Class A common stock. No fractional shares of Class A common stock will be issued in connection with the merger, and holders of the Company's common stock will be entitled to receive cash in lieu thereof.

Since CBF is the majority shareholder of the Company, CBF will be able to determine the outcome of the shareholder vote needed to approve the merger.

Net Interest Income

Net interest income in the second quarter of 2012 was significantly impacted by the Bank Merger, upon which Old Capital Bank's earning assets and interest-bearing liabilities were deconsolidated from the Company. Following the Bank Merger on June 30, 2011, the Company's interest-bearing liabilities, which consisted of subordinated debentures, significantly exceeded interest-earning assets, thus creating net interest loss and a negative net interest margin. Net interest income (loss) for the quarter ended June 30, 2012 (Successor) and the quarter ended June 30, 2011 (Successor) totaled ($284) thousand and $15.4 million, respectively. Net interest margin decreased from 4.23% in the quarter ended June 30, 2011 (Successor) to (33.57)% in the quarter ended June 30, 2012 (Successor).

Further, net interest income (loss) for the six months ended June 30, 2012 (Successor), the period of January 29 to June 30, 2011 (Successor) and the period of January 1 to January 28, 2011 (Predecessor) totaled ($561) thousand, $25.5 million and $4.0 million, respectively. The Company's net interest margin increased from 3.09% in the period of January 1 to January 28, 2011 (Predecessor) to 4.23% for the period of January 29 to June 30, 2011 (Successor), and decreased to (33.16)% for the six months ended June 30, 2012 (Successor) primarily due to the CBF Investment and Bank Merger, respectively. Average interest-earning assets decreased from $1.54 billion in the period of January 1 to January 28, 2011 (Predecessor) to $1.49 billion in the period of January 29 to June 30, 2011 (Successor) and to $3.4 million in the six months ended June 30, 2012 (Successor). The decline in average interest-earning assets in the successor period was primarily related to the Bank Merger, upon which Old Capital Bank's interest-earning assets and interest-bearing liabilities were deconsolidated from the Company. As of June 30, 2012 (Successor), the Company's only interest-earning asset was a $3.4 million advance to Capital Bank, NA.

Noninterest Income

Noninterest income for the quarter ended June 30, 2012 (Successor) and the quarter ended June 30, 2011 (Successor) totaled $2.9 million and $2.1 million, respectively. Noninterest income in the second quarter of 2012 was solely related to the Company's equity income from its investment in Capital Bank, NA.

Further, noninterest income for the six months ended June 30, 2012 (Successor), the period of January 29 to June 30, 2011 (Successor) and the period of January 1 to January 28, 2011 (Predecessor) totaled $6.0 million, $3.3 million and $832 thousand, respectively. Noninterest income in the first half of 2012 was solely related to the Company's equity income from its investment in Capital Bank, NA.

Noninterest Expense

Noninterest expense for the quarter ended June 30, 2012 (Successor) and the quarter ended June 30, 2011 (Successor) totaled $257 thousand and $12.8 million, respectively. Expenses in the second quarter of 2012 were significantly reduced by the Bank Merger and related deconsolidation of Old Capital Bank.

Further, noninterest expense for the six months ended June 30, 2012 (Successor), the period from January 29 to June 30, 2011 (Successor) and the period from January 1 to January 28, 2011 (Predecessor) totaled $414 thousand, $25.0 million and $4.2 million, respectively. Expenses in the first half of 2012 were significantly reduced by the Bank Merger and related deconsolidation of Old Capital Bank. Additionally, expenses in the period from January 29 to June 30, 2011 (Successor) were impacted by $4.0 million of contract termination fees related to the conversion and integration of the Company's operations onto a common technology platform utilized across the CBF enterprise. Salaries and benefits expense increased in the period from January 29 to June 30, 2011 (Successor) from the accelerated vesting of stock options and restricted shares at closing of the CBF Investment.

Forward-looking Statements

Information in this press release contains forward-looking statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "expect," "anticipate," "estimate," "believe," or "continue," or the negative thereof or other variations thereof or comparable terminology. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, market and economic conditions, the management of our growth, the risks associated with Capital Bank, NA's loan portfolio and real estate holdings, local economic conditions affecting retail and commercial real estate, ability to integrate our new management and directors without encountering potential difficulties, the Company's geographic concentration in the southeastern region of the United States, ability to integrate the operations of Old Capital Bank with those of Capital Bank, NA, the potential for the interests of the other shareholders of Capital Bank, NA to differ from those of the Company, restrictions imposed by Capital Bank, NA's loss sharing agreements with the FDIC, the assumptions and judgments required by loss share accounting and the acquisition method of accounting, competition within the industry, dependence on key personnel, government legislation and regulation, the risks associated with identification, completion and integration of any future acquisitions, risks related to Capital Bank, NA's technology and information systems, the fact that the Company has experienced net losses during the last three fiscal years, risks associated with the controlling interest of CBF in the Company, and risks associated with the limited liquidity of the Company's common stock. Additional factors that could cause actual results to differ materially are discussed in Capital Bank Corporation's filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Capital Bank Corporation does not undertake a duty to update any forward-looking statements in this press release.

 
 
 
CAPITAL BANK CORPORATION
Results of Operations
 
    Successor Company
(Dollars in thousands except per share data)   Three Months
Ended
Jun. 30, 2012
    Three Months
Ended
Mar. 31, 2012
    Three Months
Ended
Dec. 31, 2011
    Three Months
Ended
Sep. 30, 2011
    Three Months
Ended
Jun. 30, 2011
                                       
Interest income   $ 85     $ 85     $ 85     $ 85     $ 18,990
Interest expense     369       362       362       355       3,551
Net interest income (loss)     (284 )     (277 )     (277 )     (270 )     15,439
Provision for loan losses     -       -       -       -       1,283
Net interest income (loss) after provision     (284 )     (277 )     (277 )     (270 )     14,156
Noninterest income     2,937       3,088       1,762       2,283       2,065
Noninterest expense     257       157       175       76       12,797
Net income before taxes     2,396       2,654       1,310       1,937       3,424
Income tax expense (benefit)     (230 )     (89 )     (168 )     (117 )     1,115
Net income   $ 2,626     $ 2,743     $ 1,478     $ 2,054     $ 2,309
                                       
Earnings per share - basic and diluted   $ 0.03     $ 0.03     $ 0.02     $ 0.02     $ 0.03
                                       
                                       
                                       
End of Period Balances
 
    Successor Company
(Dollars in thousands except per share data)   Jun. 30, 2012   Mar. 31, 2012   Dec. 31, 2011   Sep. 30, 2011   Jun. 30, 2011
                               
Total assets   $ 255,787   $ 251,947   $ 249,705   $ 248,211   $ 248,562
Total earning assets     3,393     3,393     3,393     3,393     3,393
Cash and cash equivalents     985     1,820     2,163     2,435     12,477
Investment in and advance to Capital Bank, NA     254,030     249,546     247,084     245,468     235,657
Subordinated debentures     19,274     19,212     19,163     19,099     19,036
Shareholders' equity     231,130     226,947     224,827     223,494     229,419
                               
Per Share Data                              
Book value   $ 2.69   $ 2.65   $ 2.62   $ 2.60   $ 2.67
Tangible book value     2.30     2.25     2.22     2.22     2.25
                               
Common shares outstanding     85,802,164     85,802,164     85,802,164     85,802,164     85,802,164
                               
                               
                               
CAPITAL BANK CORPORATION  
Average Balances and Yields/Rates  
   
    Successor Company  
(Dollars in thousands)   Three Months
Ended
Jun. 30, 2012
    Three Months
Ended
Mar. 31, 2012
    Three Months
Ended
Dec. 31, 2011
    Three Months
Ended
Sep. 30, 2011
    Three Months
Ended
Jun. 30, 2011
 
                                         
Average Balances                                        
Total assets   $ 254,635     $ 251,304     $ 244,253     $ 248,183     $ 1,701,071  
Total earning assets     3,393       3,393       3,393       3,393       1,488,645  
Investment securities     -       -       -       -       338,035  
Loans     -       -       -       -       1,097,413  
Deposits     -       -       -       -       1,343,599  
Borrowings     -       -       -       -       93,349  
Subordinated debentures     19,253       19,191       19,142       19,078       19,323  
Shareholders' equity     229,867       226,359       224,085       228,961       231,742  
                                         
Yields/Rates 1                                        
Yield on earning assets     10.00 %     10.00 %     9.94 %     9.94 %     5.19 %
Cost of interest-bearing liabilities     7.58       7.46       7.50       7.38       1.07  
Net interest spread     2.42       2.54       2.44       2.56       4.12  
Net interest margin     (33.57 )     (32.75 )     (32.39 )     (31.57 )     4.23  
                                         
1   Annualized and on a fully taxable equivalent basis.
 
 
 
CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
    Successor Company
(Dollars in thousands)   Jun. 30, 2012   Dec. 31, 2011
             
Assets            
Cash and due from banks   $ 985   $ 2,163
  Total cash and cash equivalents     985     2,163
Equity method investment in Capital Bank, NA     250,637     243,691
Advance to Capital Bank, NA     3,393     3,393
Other assets     772     458
    Total assets   $ 255,787   $ 249,705
             
Liabilities            
Subordinated debentures   $ 19,274   $ 19,163
Other liabilities     5,383     5,715
    Total liabilities     24,657     24,878
             
Shareholders' Equity            
Common stock, no par value; 300,000,000 shares authorized; 85,802,164 and shares issued and outstanding     218,802     218,789
Retained earnings     10,636     5,267
Accumulated other comprehensive income     1,692     771
    Total shareholders' equity     231,130     224,827
    Total liabilities and shareholders' equity   $ 255,787   $ 249,705
   
   
   
CAPITAL BANK CORPORATION  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited)  
   
    Successor
Company
  Successor
Company
  Predecessor
Company
 
(Dollars in thousands except per share data)   Three Months
Ended
Jun. 30, 2012
    Three Months
Ended
Jun. 30, 2011
  Six Months
Ended
Jun. 30, 2012
    Jan. 29, 2011
to
Jun. 30, 2011
  Jan. 1, 2011
to
Jan. 28, 2011
 
                                     
Interest income:                                    
  Loans and loan fees   $ -     $ 16,465   $ -     $ 27,521   $ 5,479  
  Investment securities:                                    
    Taxable interest income     -       2,216     -       3,206     391  
    Tax-exempt interest income     -       239     -       398     74  
    Dividends     -       30     -       59     -  
  Federal funds and other interest income     85       40     170       87     11  
      Total interest income     85       18,990     170       31,271     5,955  
Interest expense:                                    
  Deposits     -       2,786     -       4,560     1,551  
  Borrowings and subordinated debentures     369       765     731       1,251     445  
      Total interest expense     369       3,551     731       5,811     1,996  
      Net interest income     (284 )     15,439     (561 )     25,460     3,959  
  Provision for loan losses     -       1,283     -       1,450     40  
      Net interest income (loss) after provision for loan losses     (284 )     14,156     (561 )     24,010     3,919  
Noninterest income:                                    
  Equity income from investment in Capital Bank, NA     2,937       -     6,025       -     -  
  Service charges and other fees     -       807     -       1,355     291  
  Bank card services     -       547     -       847     174  
  Mortgage origination and other loan fees     -       255     -       518     210  
  Brokerage fees     -       212     -       308     78  
  Bank-owned life insurance     -       114     -       134     10  
  Other     -       130     -       155     69  
      Total noninterest income     2,937       2,065     6,025       3,317     832  
Noninterest expense:                                    
  Salaries and employee benefits     -       5,568     -       9,525     1,977  
  Occupancy     -       1,830     -       2,970     548  
  Furniture and equipment     -       857     -       1,401     275  
  Data processing and telecommunications     -       635     -       911     180  
  Advertising and public relations     -       144     -       325     131  
  Office expenses     -       269     -       498     93  
  Professional fees     -       208     -       543     190  
  Business development and travel     -       304     -       550     87  
  Amortization of other intangible assets     -       287     -       478     62  
  ORE losses and miscellaneous loan costs     -       1,085     -       1,608     176  
  Directors' fees     -       53     -       93     68  
  FDIC deposit insurance     -       513     -       1,076     266  
  Contract termination fees     -       374     -       3,955     -  
  Other     257       670     414       1,093     102  
      Total noninterest expense     257       12,797     414       25,026     4,155  
      Net income before taxes     2,396       3,424     5,050       2,301     596  
Income tax expense (benefit)     (230 )     1,115     (319 )     566     -  
      Net income     2,626       2,309     5,369       1,735     596  
Dividends and accretion on preferred stock     -       -     -       -     861  
      Net income (loss) attributable to common shareholders   $ 2,626     $ 2,309   $ 5,369     $ 1,735   $ (265 )
                                     
Earnings (loss) per common share - basic   $ 0.03     $ 0.03   $ 0.06     $ 0.02   $ (0.02 )
Earnings (loss) per common share - diluted   $ 0.03     $ 0.03   $ 0.06     $ 0.02   $ (0.02 )
                                     
                                     
                                     
CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
Tax Equivalent Basis 1
   
    Successor Company  
(Dollars in thousands)   Three Months Ended
Jun. 30, 2012
    Three Months Ended
Mar. 31, 2012
    Three Months Ended
Jun. 30, 2011
 
    Average
Balance
  Amount
Earned
    Average
Rate
    Average
Balance
  Amount
Earned
    Average
Rate
    Average
Balance
  Amount
Earned
  Average
Rate
 
Assets                                                          
Loans 2   $ -   $ -     - %   $ -   $ -     - %   $ 1,098,266   $ 16,579   6.05 %
Investment securities 3     -     -     -       -     -     -       334,230     2,639   3.16  
Interest-bearing deposits     -     -     -       -     -     -       56,149     40   0.29  
Advance to Capital Bank, NA     3,393     85     10.00       3,393     85     10.00       -     -   -  
Total interest-earning assets     3,393   $ 85     10.00 %     3,393   $ 85     10.00 %     1,488,645   $ 19,258   5.19 %
Cash and due from banks     1,239                   1,950                   16,587            
Other assets     250,003                   245,961                   195,839            
  Total assets   $ 254,635                 $ 251,304                 $ 1,701,071            
                                                           
Liabilities and Equity                                                          
NOW and money market accounts   $ -   $ -     - %   $ -   $ -     - %   $ 345,307   $ 666   0.77 %
Savings accounts     -     -     -       -     -     -       32,241     10   0.12  
Time deposits     -     -     -       -     -     -       843,725     2,110   1.00  
Total interest-bearing deposits     -     -     -       -     -     -       1,221,273     2,786   0.91  
Borrowings     -     -     -       -     -     -       93,349     410   1.76  
Subordinated debentures     19,253     369     7.58       19,191     362     7.46       19,323     355   7.27  
Total interest-bearing liabilities     19,253   $ 369     7.58 %     19,191   $ 362     7.46 %     1,333,945   $ 3,551   1.07 %
Noninterest-bearing deposits     -                   -                   122,326            
Other liabilities     5,515                   5,754                   13,058            
Total liabilities     24,768                   24,945                   1,469,329            
Shareholders' equity     229,867                   226,359                   231,742            
  Total liabilities and shareholders' equity   $ 254,635                 $ 251,304                 $ 1,701,071            
                                                           
Net interest spread 4                 2.42 %                 2.54 %               4.12 %
Tax equivalent adjustment         $ -                 $ -                 $ 268      
Net interest income and net interest margin 5         $ (284 )   (33.57 )%         $ (277 )   (32.75 )%         $ 15,707   4.23 %
                                                           
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.
     
     
     
CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
Tax Equivalent Basis 1
   
    Successor Company     Predecessor Company  
(Dollars in thousands)   Six Months Ended
Jun. 30, 2012
    Period of
Jan. 29 to Jun. 30, 2011
    Period of
Jan. 1 to Jan. 28, 2011
 
    Average
Balance
  Amount
Earned
    Average
Rate
    Average
Balance
  Amount
Earned
  Average
Rate
    Average
Balance
  Amount
Earned
  Average
Rate
 
Assets                                                        
Loans 2   $ -   $ -     - %   $ 1,102,487   $ 27,734   6.12 %   $ 1,253,296   $ 5,530   5.20 %
Investment securities 3     -     -     -       298,283     3,893   3.13       225,971     504   2.68  
Interest-bearing deposits     -     -     -       88,465     87   0.24       63,350     11   0.20  
Advance to Capital Bank, NA     3,393     170     10.00       -     -   -       -     -   -  
Total interest-earning assets     3,393   $ 170     10.00 %     1,489,235   $ 31,714   5.18 %     1,542,617   $ 6,045   4.61 %
Cash and due from banks     1,594                   16,503                 16,112            
Other assets     247,983                   191,902                 34,021            
  Total assets   $ 252,970                 $ 1,697,640               $ 1,592,750            
                                                         
Liabilities and Equity                                                        
NOW and money market accounts   $ -   $ -     - %   $ 344,867   $ 1,084   0.76 %   $ 334,668   $ 211   0.74 %
Savings accounts     -     -     -       31,958     16   0.12       30,862     3   0.11  
Time deposits     -     -     -       846,753     3,460   0.99       870,146     1,337   1.81  
Total interest-bearing deposits     -     -     -       1,223,578     4,560   0.91       1,235,676     1,551   1.48  
Borrowings     -     -     -       95,414     664   1.69       120,032     343   3.36  
Subordinated debentures     19,222     731     7.52       19,417     587   7.26       34,323     102   3.50  
Total interest-bearing liabilities     19,222   $ 731     7.52 %     1,338,410   $ 5,811   1.06 %     1,390,031   $ 1,996   1.69 %
Noninterest-bearing deposits     -                   118,897                 114,660            
Other liabilities     5,635                   10,683                 9,635            
Total liabilities     24,857                   1,467,990                 1,514,326            
Shareholders' equity     228,113                   229,650                 78,424            
  Total liabilities and shareholders' equity   $ 252,970                 $ 1,697,640               $ 1,592,750            
                                                         
Net interest spread 4                 2.48 %               4.13 %               2.92 %
Tax equivalent adjustment         $ -                 $ 443               $ 90      
Net interest income and net interest margin 5         $ (561 )   (33.16 )%         $ 25,903   4.23 %         $ 4,049   3.09 %
                                                         
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.

Contact Information

  • CONTACT:
    Christopher G. Marshall
    Chief Financial Officer
    Phone: (704) 554-5901
    E-mail: cmarshall@nafhinc.com