Form 8-K Capital Bank Financial For: Apr 21

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April 21, 2017 6:33 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934


Date of report (Date of earliest event reported):  April 21, 2017


image0a22.jpg

(Exact name of registrant as specified in its charter)
 
Delaware
001-35655
27-1454759
(State or other
(Commission
(IRS Employer
jurisdiction of
File Number)
Identification No.)
incorporation)
 
 
 
4725 Piedmont Row Drive, Suite 110
Charlotte, North Carolina 28210
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (704) 554-5901


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02    Results of Operations And Financial Condition.

On April 21, 2017, Capital Bank Financial Corp. (the “Company”) issued a press release announcing its financial results for the first quarter of 2017.  A copy of the press release is furnished as Exhibit 99.1 herewith and is incorporated herein by reference.

The Company will host a conference call for investors and security analysts to discuss the financial results at 10:00 a.m. Eastern Time on April 21, 2017. By press release dated April 5, 2017, the public was invited to listen to the conference call by telephone or by live webcast accessed through the Investor Relations area of the Company’s website at www.capitalbank-us.com.  A copy of the presentation slides to be presented at the conference call is furnished as Exhibit 99.2 herewith and incorporated herein by reference.



Item 9.01    Financial Statements and Exhibits.
(d)        Exhibits

Exhibit 99.1    Press Release of Capital Bank Financial Corp. dated April 21, 2017.
Exhibit 99.2    Presentation for conference call to be conducted by Capital Bank Financial Corp. on April 21, 2017.







Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
CAPITAL BANK FINANCIAL CORP.
(Registrant)
 
 
 
 
 
 
Date: April 21, 2017
By:
/s/ Christopher G. Marshall
 
 
Christopher G. Marshall
Chief Financial Officer





Exhibit Index

Exhibit 99.1    Press Release of Capital Bank Financial Corp. dated April 21, 2017.
Exhibit 99.2    Presentation for conference call to be conducted by Capital Bank Financial Corp. on April 21, 2017.






CBF Reports First Quarter Results
Page 1
April 21, 2017


EXHIBIT 99.1
 

CONTACT:
Kenneth A. Posner
Chief of Strategic Planning and Investor Relations
Phone: (212) 399-4020


CAPITAL BANK FINANCIAL CORP. REPORTS FIRST QUARTER GAAP AND CORE EPS OF $0.39 AND $0.45

CHARLOTTE, NC. (April 21, 2017) - Capital Bank Financial Corp. (Nasdaq: CBF) (the “Company”) today reported first quarter net income of $20.9 million, which increased 112% year over year. GAAP net income per diluted share was $0.39. Core net income increased to $23.9 million, up 42% year over year. Core net income per diluted share was $0.45. Core pre-tax adjustments for the first quarter of 2017 included $4.9 million of acquisition and branch closure expenses, offset by $0.1 million gain on investment securities.
“With the CommunityOne conversion now behind us, we are totally focused on high-quality loan and core deposit growth. Thanks to the consistent focus and efforts of Capital Bank’s teammates, we’re optimistic about the outlook,” said Gene Taylor, Chairman and Chief Executive Officer of Capital Bank Financial Corp.
“In addition to successfully completing the CommunityOne systems conversion, we’ve put in place new plans to rationalize excess facilities, which will help us achieve our stated profitability and return targets,” added Chris Marshall, Chief Financial Officer of Capital Bank Financial Corp.

Loan Portfolio and Composition

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

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

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


Deposits Composition and Cost of Funds

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

Net Interest Income and Net Interest Margin

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

- MORE -


CBF Reports First Quarter Results
Page 2
April 21, 2017



Non-Interest Income

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

Provision for Loan and Lease Losses and Credit Quality

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

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

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

Non-Interest Expense

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

Income Tax Expense

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

Financial Position

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

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

Conference Call

The Company will host a conference call today at 10:00 a.m. Eastern Time. The number to call for this interactive teleconference is (913) 312-0654, and the confirmation pass code is 7115841. Please dial in 10 minutes prior to the beginning of the call. A telephonic replay of the conference call will be available through April 28, 2017, by dialing (719) 457-0820 and entering pass

- MORE -


CBF Reports First Quarter Results
Page 3
April 21, 2017


code 7115841. The live broadcast of the conference call will be available online at the Company’s web site at www.capitalbank-us.com, by following the link to Investor Relations. An on-line replay of the call will be available at the same site for 90 days.

Forward-Looking Statements

Information in this press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described under the caption “Risk Factors” in the annual report on Form 10-K and other periodic reports filed by us with the Securities and Exchange Commission. Any or all of our forward-looking statements in this press release may turn out to be inaccurate. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward looking statements including, but not limited to: (1) changes in general economic and financial market conditions; (2) changes in the regulatory environment; (3) economic conditions generally and in the financial services industry; (4) changes in the economy affecting real estate values; (5) our ability to achieve loan and deposit growth; (6) the completion of future acquisitions or business combinations and our ability to integrate any acquired businesses into our business model; (7) projected population and income growth in our targeted market areas; (8) competitive pressures in our markets and industry; (9) our ability to attract and retain key personnel; (10) changes in accounting policies or judgments and (11) volatility and direction of market interest rates and a weakening of the economy which could materially impact credit quality trends and the ability to generate loans. All forward-looking statements are necessarily only estimates of future results, and actual results may differ materially from expectations. You are, therefore, cautioned not to place undue reliance on such statements, which should be read in conjunction with the other cautionary statements that are included elsewhere in this press release. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

Use of Non-GAAP Financial Measures

Core net income, core efficiency ratio, core return-on-assets (“core ROA”), tangible book value and tangible book value per share are each non-GAAP measures used in this report.  A reconciliation to the most directly comparable GAAP financial measures – net income in the case of core net income and core ROA, total non-interest income and total non-interest expense in the case of core efficiency ratio, and total shareholders’ equity in the case of tangible book value and tangible book value per share – appears in tabular form at the end of this release.  The Company believes core net income, the core efficiency ratio and core ROA are useful for both investors and management to understand the effects of certain non-interest items and provide an alternative view of the Company’s performance over time and in comparison to the Company’s competitors. These measures should not be viewed as a substitute for net income.  The Company believes that tangible book value and tangible book value per share are useful for both investors and management as these are measures commonly used by financial institutions, regulators and investors to measure the capital adequacy of financial institutions.  The Company believes these measures facilitate comparison of the quality and composition of the Company’s capital over time and in comparison to its competitors. These measures should not be viewed as a substitute for the most directly comparable GAAP measure.

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

These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited.  They should not be considered in isolation or as a substitute for analysis of results reported under GAAP.  These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

About Capital Bank Financial Corp.


- MORE -


CBF Reports First Quarter Results
Page 4
April 21, 2017


Capital Bank Financial Corp. is a bank holding company, formed in 2009 to create a premier regional banking franchise in the southeastern United States. CBF is the parent of Capital Bank Corporation, a State of North Carolina chartered financial institution with $10.1 billion in total assets as of March 31, 2017, and 193 full-service banking offices throughout Florida, North and South Carolina, Tennessee and Virginia. To learn more about Capital Bank Financial Corp, please visit www.capitalbank-us.com. 


- MORE -


CBF Reports First Quarter Results
Page 5
April 21, 2017


 CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share data)
(Unaudited)
 
Three Months Ended
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
Mar 31,
2016
Interest and dividend income
$
92,937

 
$
87,746

 
$
70,929

 
$
69,579

 
$
69,472

Interest expense
10,821

 
9,927

 
8,302

 
8,064

 
8,105

Net Interest Income
82,116

 
77,819

 
62,627

 
61,515

 
61,367

Provision for loan and lease losses
3,392

 
1,980

 
586

 
1,172

 
1,375

Net interest income after provision for loan and lease losses
78,724

 
75,839

 
62,041

 
60,343

 
59,992

Non-Interest Income
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
5,375

 
5,949

 
4,777

 
4,486

 
4,811

Debit card income
4,765

 
4,211

 
3,389

 
3,235

 
3,086

Fees on mortgage loans originated and sold
1,248

 
1,402

 
1,334

 
1,140

 
971

Investment advisory and trust fees
641

 
591

 
290

 
455

 
497

Termination of loss share agreements
—

 
—

 
—

 
—

 
(9,178
)
Investment securities gains (losses), net
67

 
1,894

 
71

 
117

 
40

Other income
3,756

 
2,969

 
2,509

 
2,489

 
2,339

Total non-interest income
15,852

 
17,016

 
12,370

 
11,922

 
2,566

Non-Interest Expense
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
29,166

 
26,134

 
20,935

 
20,139

 
22,162

Stock-based compensation expense
900

 
531

 
790

 
467

 
317

Net occupancy and equipment expense
8,992

 
8,374

 
7,340

 
7,355

 
7,703

Computer services
3,873

 
4,364

 
3,153

 
3,274

 
3,575

Software expense
2,662

 
2,391

 
1,948

 
2,000

 
2,036

Telecommunication expense
2,424

 
2,147

 
1,790

 
1,558

 
1,532

OREO valuation expense
247

 
677

 
742

 
1,119

 
467

Net gains on sales of OREO
(308
)
 
(150
)
 
(159
)
 
(413
)
 
(679
)
Foreclosed asset related expense
364

 
513

 
397

 
399

 
285

Loan workout expense
201

 
327

 
206

 
71

 
244

Conversion and merger related expense
3,037

 
18,525

 
394

 
1,236

 
1,687

Professional fees
2,096

 
1,761

 
1,642

 
1,353

 
1,612

Restructuring charges, net
1,912

 
4

 
(113
)
 
5

 
142

Legal settlement expense
—

 
1,361

 
1,500

 
—

 
—

Regulatory assessments
719

 
1,092

 
841

 
1,259

 
1,275

Other expense
6,418

 
5,943

 
6,124

 
4,714

 
4,580

Total non-interest expense
62,703

 
73,994

 
47,530

 
44,536

 
46,938

Income before income taxes
31,873

 
18,861

 
26,881

 
27,729

 
15,620

Income tax expense
10,990

 
6,427

 
8,393

 
10,327

 
5,780

Net income
$
20,883

 
$
12,434

 
$
18,488

 
$
17,402

 
$
9,840

 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.40

 
$
0.25

 
$
0.43

 
$
0.40

 
$
0.23

Diluted
$
0.39

 
$
0.24

 
$
0.42

 
$
0.40

 
$
0.22

 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
51,634

 
49,334

 
43,028

 
43,011

 
43,063

Diluted
53,127

 
50,387

 
43,909

 
43,879

 
43,904


- MORE -


CBF Reports First Quarter Results
Page 6
April 21, 2017


CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)
(Unaudited)
 
Mar 31,
2017
 
Dec 31,
2016
 
Mar 31,
2016
Assets
 
 
 
 
 
Cash and due from banks
$
100,134

 
$
107,707

 
$
88,802

Interest-bearing deposits in other banks
60,413

 
201,348

 
93,218

Total cash and cash equivalents
160,547

 
309,055

 
182,020

Trading securities
4,150

 
3,791

 
3,418

Investment securities available-for-sale at fair value (amortized cost $1,168,995 $927,266 and $657,631, respectively)
1,154,496

 
912,250

 
663,925

Investment securities held-to-maturity at amortized cost (fair value $445,696 $460,911 and $467,372, respectively)
446,020

 
463,959

 
460,483

Loans held for sale
4,980

 
12,874

 
8,070

Loans, net of deferred loan costs and fees
7,506,975

 
7,393,318

 
5,626,887

Less: Allowance for loan and lease losses
43,891

 
43,065

 
45,263

Loans, net
7,463,084

 
7,350,253

 
5,581,624

Other real estate owned
51,050

 
53,482

 
48,505

Premises and equipment, net
199,167

 
205,425

 
157,131

Goodwill
234,158

 
235,500

 
134,522

Intangible assets, net
31,553

 
33,370

 
14,166

Deferred income tax asset, net
146,724

 
150,272

 
95,363

Bank owned life insurance
100,251

 
99,703

 
56,425

Other assets
101,862

 
100,723

 
74,146

Total Assets
$
10,098,042

 
$
9,930,657

 
$
7,479,798

Liabilities and Shareholders’ Equity
 
 
 
 
 

Liabilities
 
 
 
 
 

Deposits:
 
 
 
 
 

Non-interest bearing demand
$
1,680,243

 
$
1,590,164

 
$
1,190,831

Interest bearing demand
1,960,187

 
1,930,143

 
1,402,342

Money market
1,821,474

 
1,725,838

 
1,262,581

Savings
496,230

 
497,171

 
420,073

Time deposits
2,134,473

 
2,137,312

 
1,663,906

Total deposits
8,092,607

 
7,880,628

 
5,939,733

Federal Home Loan Bank advances
490,650

 
545,701

 
400,849

Short-term borrowings
21,125

 
19,157

 
16,200

Long-term borrowings
117,272

 
116,456

 
86,328

Accrued expenses and other liabilities
68,457

 
76,668

 
39,695

Total liabilities
$
8,790,111

 
$
8,638,610

 
$
6,482,805

Shareholders’ equity
 
 
 
 
 

Preferred stock $0.01 par value: 50,000 shares authorized, 0 shares issued
—

 
—

 
—

Common stock-Class A $0.01 par value: 200,000 shares authorized, 46,479
issued and 35,213 outstanding, 46,178 issued 34,911 outstanding and 37,207 issued and 26,636 outstanding, respectively.
465

 
462

 
372

Common stock-Class B $0.01 par value: 200,000 shares authorized, 18,527
issued and 16,753 outstanding, 18,627 issued and 16,854 outstanding and 18,327 issued and 16,554 outstanding, respectively.
185

 
186

 
183

Additional paid in capital
1,369,689

 
1,368,459

 
1,076,931

Retained earnings
262,443

 
247,758

 
214,268

Accumulated other comprehensive (loss) gain
(12,467
)
 
(12,434
)
 
3,878

Treasury stock, at cost, 13,040, 13,040 and 12,345 shares, respectively
(312,384
)
 
(312,384
)
 
(298,639
)
Total shareholders’ equity
1,307,931

 
1,292,047

 
996,993

Total Liabilities and Shareholders’ Equity
$
10,098,042

 
$
9,930,657

 
$
7,479,798

 

- MORE -


CBF Reports First Quarter Results
Page 7
April 21, 2017


CAPITAL BANK FINANCIAL CORP.
KEY METRICS
(Dollars in thousands)
(Unaudited)
 
Three Months Ended
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
Mar 31,
2016
Performance Ratios
 
 
 
 
 
 
 
 
 
Interest rate spread
3.58
%
 
3.53
%
 
3.43
%
 
3.48
%
 
3.50
%
Net interest margin
3.73
%
 
3.67
%
 
3.58
%
 
3.62
%
 
3.64
%
Return on average assets
0.84
%
 
0.53
%
 
0.97
%
 
0.93
%
 
0.53
%
Return on average shareholders’ equity
6.43
%
 
4.05
%
 
7.24
%
 
6.87
%
 
3.96
%
Efficiency ratio
64.00
%
 
78.02
%
 
63.38
%
 
60.65
%
 
73.42
%
Average interest-earning assets to average interest-bearing liabilities
129.53
%
 
130.22
%
 
131.43
%
 
131.21
%
 
129.54
%
Average loans receivable to average deposits
93.41
%
 
94.57
%
 
98.46
%
 
96.56
%
 
95.66
%
Yield on interest-earning assets
4.21
%
 
4.13
%
 
4.05
%
 
4.09
%
 
4.11
%
Cost of interest-bearing liabilities
0.63
%
 
0.61
%
 
0.62
%
 
0.62
%
 
0.62
%
Asset and Credit Quality Ratios-Total Loans
 

 
 

 
 

 
 

 
 

Non-accrual loans
$
13,608

 
$
11,449

 
$
11,873

 
$
9,016

 
$
8,526

Acquired impaired loans > 90 days past due and still accruing
$
57,969

 
$
63,668

 
$
48,477

 
$
56,108

 
$
56,041

Nonperforming loans to loans receivable
0.95
%
 
1.01
%
 
1.02
%
 
1.13
%
 
1.15
%
Nonperforming assets to total assets
1.22
%
 
1.30
%
 
1.37
%
 
1.44
%
 
1.51
%
ALLL to nonperforming assets
35.73
%
 
33.45
%
 
41.29
%
 
40.98
%
 
39.97
%
ALLL to total gross loans
0.58
%
 
0.58
%
 
0.75
%
 
0.78
%
 
0.80
%
Annualized net charge-offs/average loans
0.14
%
 
0.17
%
 
0.10
%
 
0.11
%
 
0.08
%
Asset and Credit Quality Ratios-Non Acquired Loans
 

 
 

 
 

 
 

 
 

Nonperforming non acquired loans to total non acquired loans receivable
0.21
%
 
0.18
%
 
0.19
%
 
0.12
%
 
0.11
%
Non acquired loans ALLL to total gross non acquired loans receivable
0.40
%
 
0.41
%
 
0.43
%
 
0.46
%
 
0.47
%
Asset and Credit Quality Ratios-Acquired Loans
 
 
 
 
 
 
 
 
 
Nonperforming acquired loans to total acquired loans receivable
2.55
%
 
2.66
%
 
4.65
%
 
5.08
%
 
4.67
%
Acquired loans ALLL to total gross acquired loans
0.98
%
 
0.93
%
 
2.15
%
 
2.04
%
 
1.93
%
Capital Ratios (Company) (1)
 

 
 

 
 

 
 

 
 

Total average shareholders’ equity to total average assets
13.11
%
 
13.15
%
 
13.46
%
 
13.55
%
 
13.35
%
Tangible common equity ratio (2)
10.60
%
 
10.59
%
 
11.55
%
 
11.62
%
 
11.57
%
Tier 1 leverage capital ratio
11.63
%
 
12.22
%
 
12.89
%
 
12.64
%
 
12.49
%
Tier 1 common capital ratio
12.18
%
 
12.40
%
 
13.27
%
 
13.38
%
 
13.38
%
Tier 1 risk-based capital ratio
13.43
%
 
13.49
%
 
14.44
%
 
14.57
%
 
14.58
%
Total risk-based capital ratio
13.96
%
 
14.02
%
 
15.12
%
 
15.29
%
 
15.32
%
Capital Ratios (Bank) (1)
 

 
 

 
 

 
 

 
 

Tangible common equity ratio (2)
11.03
%
 
11.07
%
 
10.74
%
 
10.71
%
 
11.45
%
Tier 1 leverage capital ratio
10.67
%
 
11.23
%
 
10.53
%
 
10.42
%
 
11.10
%
Tier 1 common capital ratio
12.32
%
 
12.39
%
 
11.98
%
 
11.97
%
 
12.95
%
Tier 1 risk-based capital ratio
12.32
%
 
12.39
%
 
11.98
%
 
11.97
%
 
12.95
%
Total risk-based capital ratio
12.86
%
 
12.93
%
 
12.70
%
 
12.72
%
 
13.72
%

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


- MORE -


CBF Reports First Quarter Results
Page 8
April 21, 2017


CAPITAL BANK FINANCIAL CORP.
LOANS AND DEPOSITS
(Dollars in thousands)
(Unaudited)
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
Mar 31,
2016
Loans
 
 
 
 
 
 
 
 
 
Non-owner occupied commercial real estate
$
1,187,344

 
$
1,130,883

 
$
920,521

 
$
891,830

 
$
850,766

Other commercial construction and land
350,401

 
327,622

 
222,794

 
212,315

 
194,971

Multifamily commercial real estate
115,996

 
117,515

 
76,296

 
74,328

 
75,737

1-4 family residential construction and land
157,920

 
140,030

 
111,954

 
100,306

 
96,703

Total commercial real estate
1,811,661

 
1,716,050

 
1,331,565

 
1,278,779

 
1,218,177

Owner occupied commercial real estate
1,313,086

 
1,321,405

 
1,072,586

 
1,075,306

 
1,095,460

Commercial and industrial
1,443,828

 
1,468,874

 
1,458,523

 
1,448,698

 
1,375,233

Lease financing
—

 
—

 
525

 
877

 
1,088

Total commercial
2,756,914

 
2,790,279

 
2,531,634

 
2,524,881

 
2,471,781

1-4 family residential
1,787,097

 
1,714,702

 
1,168,468

 
1,039,309

 
1,015,071

Home equity loans
502,099

 
507,759

 
364,117

 
364,169

 
368,510

Indirect auto loans
199,951

 
226,717

 
254,736

 
285,618

 
317,863

Other consumer loans
222,824

 
222,255

 
94,277

 
85,964

 
84,108

Total consumer
2,711,971

 
2,671,433

 
1,881,598

 
1,775,060

 
1,785,552

Other
231,409

 
228,430

 
191,136

 
166,185

 
159,447

Total loans
$
7,511,955

 
$
7,406,192

 
$
5,935,933

 
$
5,744,905

 
$
5,634,957

 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 

 
 

 
 

 
 

Non-interest bearing demand
$
1,680,243

 
$
1,590,164

 
$
1,207,800

 
$
1,172,481

 
$
1,190,831

Interest bearing demand
1,960,187

 
1,930,143

 
1,463,520

 
1,456,558

 
1,402,342

Money market
1,746,444

 
1,651,023

 
1,166,918

 
1,105,460

 
1,162,546

Savings
496,230

 
497,171

 
401,205

 
403,106

 
420,073

Total core deposits
5,883,104

 
5,668,501

 
4,239,443

 
4,137,605

 
4,175,792

Wholesale money market
75,030

 
74,815

 
125,030

 
50,015

 
100,035

Time deposits
2,134,473

 
2,137,312

 
1,668,784

 
1,619,507

 
1,663,906

Total deposits
$
8,092,607

 
$
7,880,628

 
$
6,033,257

 
$
5,807,127

 
$
5,939,733

 



- MORE -


CBF Reports First Quarter Results
Page 9
April 21, 2017


CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
 
Three Months Ended 
March 31, 2017
 
Three Months Ended 
December 31, 2016
 
 
Average
Balances
 
Interest
 
Yield / Rate
 
Average
Balances
 
Interest
 
Yield / Rate
Interest earning assets
 
 
 
 
 
 
 
 
 
 
 
 
Loans (1)
 
$
7,409,284

 
$
83,753

 
4.58
%
 
$
6,977,690

 
$
79,690

 
4.54
%
Investment securities (1)
 
1,501,816

 
9,312

 
2.51
%
 
1,347,554

 
8,065

 
2.38
%
Interest bearing deposits in other banks
 
58,269

 
97

 
0.68
%
 
143,446

 
166

 
0.46
%
Other earning assets (2)
 
29,053

 
357

 
4.98
%
 
30,904

 
382

 
4.92
%
Total interest earning assets
 
8,998,422

 
$
93,519

 
4.21
%
 
8,499,594

 
$
88,303

 
4.13
%
Non-interest earning assets
 
909,138

 
 
 
 
 
829,740

 
 
 
 
Total assets
 
$
9,907,560

 
 
 
 
 
$
9,329,334

 
 
 
 
Interest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
2,141,806

 
$
4,539

 
0.86
%
 
$
2,049,066

 
$
4,526

 
0.88
%
Money market
 
1,777,343

 
1,756

 
0.40
%
 
1,601,167

 
1,498

 
0.37
%
Interest bearing demand
 
1,922,687

 
1,138

 
0.24
%
 
1,748,269

 
935

 
0.21
%
Savings
 
494,538

 
220

 
0.18
%
 
471,466

 
219

 
0.18
%
Total interest bearing deposits
 
6,336,374

 
7,653

 
0.49
%
 
5,869,968

 
7,178

 
0.49
%
Short-term borrowings and FHLB advances
 
493,643

 
887

 
0.73
%
 
548,667

 
662

 
0.48
%
Long-term borrowings
 
116,744

 
2,281

 
7.92
%
 
108,276

 
2,087

 
7.67
%
Total interest bearing liabilities
 
6,946,761

 
10,821

 
0.63
%
 
6,526,911

 
9,927

 
0.61
%
Non-interest bearing demand
 
1,595,695

 
 
 
 
 
1,508,496

 
 
 
 
Other liabilities
 
65,753

 
 
 
 
 
66,710

 
 
 
 
Shareholders’ equity
 
1,299,351

 
 
 
 
 
1,227,217

 
 
 
 
Total liabilities and shareholders’ equity
 
$
9,907,560

 
 
 
 
 
$
9,329,334

 
 
 
 
Net interest income and spread
 
 
 
$
82,698

 
3.58
%
 
 
 
$
78,376

 
3.53
%
Net interest margin
 
 
 
 
 
3.73
%
 
 
 
 
 
3.67
%

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















- MORE -


CBF Reports First Quarter Results
Page 10
April 21, 2017


CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
 
Three Months Ended 
March 31, 2017
 
Three Months Ended 
March 31, 2016
 
 
Average
Balances
 
Interest
 
Yield / Rate
 
Average
Balances
 
Interest
 
Yield / Rate
Interest earning assets
 
 
 
 
 
 
 
 
 
 
 
 
Loans (1)
 
$
7,409,284

 
$
83,753

 
4.58
%
 
$
5,611,488

 
$
63,009

 
4.52
%
Investment securities (1)
 
1,501,816

 
9,312

 
2.51
%
 
1,122,523

 
6,483

 
2.32
%
Interest bearing deposits in other banks
 
58,269

 
97

 
0.68
%
 
73,188

 
84

 
0.46
%
Other earning assets (2)
 
29,053

 
357

 
4.98
%
 
25,136

 
315

 
5.04
%
Total interest earning assets
 
8,998,422

 
$
93,519

 
4.21
%
 
6,832,335

 
$
69,891

 
4.11
%
Non-interest earning assets
 
909,138

 
 
 
 
 
618,087

 
 
 
 
Total assets
 
$
9,907,560

 
 
 
 
 
$
7,450,422

 
 
 
 
Interest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
2,141,806

 
$
4,539

 
0.86
%
 
$
1,689,653

 
$
4,120

 
0.98
%
Money market
 
1,777,343

 
1,756

 
0.40
%
 
1,247,333

 
1,067

 
0.34
%
Interest bearing demand
 
1,922,687

 
1,138

 
0.24
%
 
1,370,957

 
648

 
0.19
%
Savings
 
494,538

 
220

 
0.18
%
 
419,588

 
227

 
0.22
%
Total interest bearing deposits
 
6,336,374

 
7,653

 
0.49
%
 
4,727,531

 
6,062

 
0.52
%
Short-term borrowings and FHLB advances
 
493,643

 
887

 
0.73
%
 
460,892

 
532

 
0.46
%
Long-term borrowings
 
116,744

 
2,281

 
7.92
%
 
85,986

 
1,511

 
7.07
%
Total interest bearing liabilities
 
6,946,761

 
10,821

 
0.63
%
 
5,274,409

 
8,105

 
0.62
%
Non-interest bearing demand
 
1,595,695

 
 
 
 
 
1,138,782

 
 
 
 
Other liabilities
 
65,753

 
 
 
 
 
42,418

 
 
 
 
Shareholders’ equity
 
1,299,351

 
 
 
 
 
994,813

 
 
 
 
Total liabilities and shareholders’ equity
 
$
9,907,560

 
 
 
 
 
$
7,450,422

 
 
 
 
Net interest income and spread
 
 
 
$
82,698

 
3.58
%
 
 
 
$
61,786

 
3.50
%
Net interest margin
 
 
 
 
 
3.73
%
 
 
 
 
 
3.64
%
 
(1) Presented on a fully tax equivalent basis
(2) Includes Federal Home Loan Bank stocks






- MORE -


CBF Reports First Quarter Results
Page 11
April 21, 2017


CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES
(Dollars in thousands)
(Unaudited)

CORE NET INCOME
 
Three Months Ended
 
 
Mar 31, 2017
 
Dec 31, 2016
 
Mar 30, 2016
Net Income
 
$
20,883

 
$
20,883

 
$
12,434

 
$
12,434

 
$
9,840

 
$
9,840

 
 
Pre-Tax
 
After-Tax
 
Pre-Tax
 
After-Tax
 
Pre-Tax
 
After-Tax
Adjustments
 
 

 
 

 
 

 
 

 
 

 
 

Non-interest income
 
 

 
 

 
 

 
 

 
 

 
 

Indemnification asset termination
 
—

 
—

 
—

 
—

 
9,178

 
5,670

Security (gains) losses*
 
(67
)
 
(41
)
 
(1,894
)
 
(1,170
)
 
(40
)
 
(25
)
Non-interest expense
 
 
 
 
 
 
 
 
 
 
 
 
Legal Settlement
 
—

 
—

 
1,361

 
841

 
—

 
—

Tax Adjustment
 
—

 
—

 
(1,350
)
 
(1,350
)
 
—

 
—

Severance expense*
 
—

 
—

 
7

 
4

 
75

 
46

Restructuring expense*
 
1,912

 
1,181

 
4

 
3

 
142

 
88

Conversion costs and merger tax deductible*
 
3,037

 
1,877

 
18,245

 
11,270

 
1,107

 
684

Legal merger non deductible
 
—

 
—

 
280

 
280

 
580

 
580

Tax effect of adjustments*
 
(1,865
)
 
N/A

 
(6,775
)
 
N/A

 
(3,999
)
 
N/A

Core Net Income
 
$
23,900

 
$
23,900

 
$
22,312

 
$
22,312

 
$
16,883

 
$
16,883

 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted shares
 
53,127

 
 
 
50,387

 
 
 
43,904

 
 
Core Net Income per share
 
$
0.45

 
 
 
$
0.44

 
 
 
$
0.38

 
 
Average Assets
 
9,907,560

 
 

 
9,329,334

 
 

 
7,450,422

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
ROA**
 
0.84
%
 


 
0.53
%
 


 
0.53
%
 


Core ROA***
 
0.96
%
 
 
 
0.96
%
 
 
 
0.91
%
 
 

* Tax effected at an income tax rate of 38%
** ROA: Annualized net income / Average assets
*** Core ROA: Annualized core net income / Average assets












- MORE -


CBF Reports First Quarter Results
Page 12
April 21, 2017


CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES (Continuation)
(Dollars in thousands)
(Unaudited)

CORE EFFICIENCY RATIO
Three Months Ended
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
Mar 31,
2016
Net interest income
$
82,116

 
$
77,819

 
$
62,627

 
$
61,515

 
$
61,367

 
 
 
 
 
 
 
 
 
 
Reported non-interest income
15,852

 
17,016

 
12,370

 
11,922

 
2,566

Indemnification asset termination
—

 
—

 
—

 
—

 
(9,178
)
Less: Securities gains (losses)
67

 
1,894

 
71

 
117

 
40

Core non-interest income
$
15,785

 
$
15,122

 
$
12,299

 
$
11,805

 
$
11,704

 
 
 
 
 
 
 
 
 
 
Reported non-interest expense
$
62,703

 
$
73,994

 
$
47,530

 
$
44,536

 
$
46,938

Less: Severance expense
—

 
7

 
—

 
—

 
75

Conversion costs and merger tax deductible
3,037

 
18,245

 
331

 
881

 
1,107

Legal settlement
—

 
1,361

 
1,500

 
—

 
—

Legal merger non deductible
—

 
280

 
61

 
355

 
580

Restructuring expense
1,912

 
4

 
(113
)
 
5

 
142

Contract termination
—

 
—

 
—

 
—

 
—

Conversion and severance expenses (conversion and merger expenses and salaries and employees benefits)
—

 
—

 
—

 
—

 
—

Core non-interest expense
$
57,754

 
$
54,097

 
$
45,751

 
$
43,295

 
$
45,034

 
 
 
 
 
 
 
 
 
 
Efficiency ratio*
64.00
%
 
78.02
%
 
63.38
%
 
60.65
%
 
73.42
%
Core efficiency ratio**
58.99
%
 
58.21
%
 
61.06
%
 
59.05
%
 
61.63
%
  
* Efficiency Ratio: Non-interest expense / (Non-interest income + Net interest income)
** Core Efficiency Ratio: Core non-interest expense / (Core non-interest income + Net interest income)


- MORE -


CBF Reports First Quarter Results
Page 13
April 21, 2017


CAPITAL BANK FINANCIAL CORP.
RECONCILIATION OF NON-GAAP MEASURES (Continuation)
(Dollars and shares in thousands, except per share data)
(Unaudited)
TANGIBLE BOOK VALUE
 
Three Months Ended
 
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
Mar 31,
2016
Total shareholders’ equity
 
$
1,307,931

 
$
1,292,047

 
$
1,029,841

 
$
1,016,498

 
$
996,993

Less: goodwill and intangible assets, net of taxes
 
(253,708
)
 
(256,176
)
 
(142,141
)
 
(142,725
)
 
(143,304
)
Tangible book value*
 
$
1,054,223

 
$
1,035,871

 
$
887,700

 
$
873,773

 
$
853,689

Common shares outstanding
 
51,966

 
51,765

 
43,235

 
43,219

 
43,189

Tangible book value per share
 
$
20.29

 
$
20.01

 
$
20.53

 
$
20.22

 
$
19.77

* Tangible book value is equal to book value less goodwill and core deposit intangibles, net of related deferred tax liabilities.


TANGIBLE COMMON EQUITY RATIO
 
Three Months Ended
 
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
Mar 31,
2016
Total shareholders’ equity
 
$
1,307,931

 
$
1,292,047

 
$
1,029,841

 
$
1,016,498

 
$
996,993

Less: goodwill and intangible assets
 
(265,711
)
 
(268,870
)
 
(146,810
)
 
(147,753
)
 
(148,688
)
Tangible common equity
 
$
1,042,220

 
$
1,023,177

 
$
883,031

 
$
868,745

 
$
848,305

Total assets
 
$
10,098,042

 
$
9,930,657

 
$
7,792,458

 
$
7,621,225

 
$
7,479,798

Less: goodwill and intangible assets
 
(265,711
)
 
(268,870
)
 
(146,810
)
 
(147,753
)
 
(148,688
)
Tangible assets
 
$
9,832,331

 
$
9,661,787

 
$
7,645,648

 
$
7,473,472

 
$
7,331,110

Tangible common equity ratio
 
10.60
%
 
10.59
%
 
11.55
%
 
11.62
%
 
11.57
%
























2017 First Quarter Earnings April 21, 2017

 
04/21/2017 Safe Harbor Statement Forward-Looking Statements Information in this presentation contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described under the caption "Risk Factors" in the annual report on Form 10-K and other periodic reports filed by us with the Securities and Exchange Commission. Any or all of our forward-looking statements in this press release may turn out to be inaccurate. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward looking statements including, but not limited to: (1) changes in general economic and financial market conditions; (2) changes in the regulatory environment; (3) economic conditions generally and in the financial services industry; (4) changes in the economy affecting real estate values; (5) our ability to achieve loan and deposit growth; (6) the completion of future acquisitions or business combinations and our ability to integrate any acquired businesses into our business model; (7) projected population and income growth in our targeted market areas; (8) competitive pressures in our markets and industry; (9) our ability to attract and retain key personnel; (10) changes in accounting policies or judgments and (11) volatility and direction of market interest rates and a weakening of the economy which could materially impact credit quality trends and the ability to generate loans. All forward-looking statements are necessarily only estimates of future results, and actual results may differ materially from expectations. You are, therefore, cautioned not to place undue reliance on such statements, which should be read in conjunction with the other cautionary statements that are included elsewhere in this press release. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. 2

 
04/21/2017 Southeastern Regional Bank in Attractive Growth Markets Eight Acquisitions 3 One Southeastern Franchise

 
04/21/2017 4 First Quarter Highlights Note: See reconciliation of core EPS, core ROA, and core efficiency ratio in appendix ■ Reported EPS of $0.39 and Core EPS of $0.45 ■ Generated ROA of 0.84% and Core ROA of 0.96% ■ Successfully completed CommunityOne systems conversion, remain on track for mid-40s cost saves ■ Grew loans 6% LQA and core deposits 15% LQA, with deposit costs flat ■ NIM expanded by 6 bps to 3.73% ■ Reported efficiency ratio of 64% including merger and branch closure charges, and sustained Core efficiency ratio at 59%, below our 60% target ■ Total assets grew to $10.1 billion

 
04/21/2017 ■ 1Q17 includes CommunityOne for full quarter ■ Provision covers charge-offs, includes reserve build of $0.7M ■ GAAP efficiency ratio of 64% includes conversion charges and branch closures; core efficiency ratio under 60% target 5 First Quarter Financial Summary Note: See reconciliation of Core net income, Core EPS, Core fee ratio, Core efficiency ratio, Core ROA, and Core ROTCE in appendix ($ mm's except per share data, growth rates, and metrics) 1Q17 4Q16 1Q16 Net interest income 82.1$ 6% 34% Provision 3.4 71% 147% Non-interest income 15.9 -7% 518% Non-interest expense 62.7 -15% 34% Pretax income 31.9 69% 104% Net income 20.9 68% 112% Per share 0.39$ 61% 75% Non-GAAP Adjustments 3.0 NM NM Core net income 23.9 7% 42% Per share 0.45$ 2% 17% Key Metrics 1Q17 4Q16 1Q16 Net interest margin (NIM) 3.73 3.67 3.64 Fee ratio 16.2% 17.9% 4.0% Efficiency ratio 64.0% 78.0% 73.4% ROA 0.84% 0.53% 0.53% ROE 6.4% 4.1% 4.0% Non-GAAP Core Metri s Core fee ratio 16.1% 16.3% 16.1% Core efficiency ratio 59.0% 58.2% 61.6% Core ROA 0.96% 0.96% 0.91% Core ROTCE 9.2% 8.7% 8.0% % change

 
04/21/2017 6 Note: See reconciliation of core EPS, core ROA, and core efficiency ratio in appendix Tangible Book Value Per Share Non-GAAP Adjustments Detail (In thousands) First Quarter Financial Summary (continued) ■ Conversion expenses of $3.0M during 1Q17, in line with expected costs ■ Branch closure expenses of $1.9M ■ Dividend of $0.12/share declared for 1Q17 4Q16 20.01$ Net Income 0.39 Other 0.01 Dividends (0.12) 1Q17 20.29$ Non-core adjustments detail 1Q17 Conversion costs and merger tax deductible 3,037$ Restructuring expenses 1,912 Tax adjustment - Securities gains (67) Total pre-tax 4,882 Tax effect of adjustments (1,865) Total after-tax 3,017$

 
04/21/2017 -$30 -$32 -$11 $7,406 +$178 $7,512 4Q16 Total Loans Run-off of Prime Indirect Auto Reduced Line Utilization C1 Transition Net New Loans 1Q17 Total Loans 21.06 7 Consistent High-Quality Loan Production New Loans by Product (In millions) New Loans by Geography (In millions) Loan Production/Run-off Roll-forward (In millions) 145 230 152 148 149 89 133 123 165 181 62 110 196 132 175 $296 $473 $471 $445 $505 1Q16 2Q16 3Q16 4Q16 1Q17 Commercial CRE Consumer 75 139 213 116 182 141 183 138 241 228 80 151 120 88 95 $296 $473 $471 $445 $505 1Q16 2Q16 3Q16 4Q16 1Q17 Florida Carolinas Tennessee

 
04/21/2017 Note: Core deposits include noninterest demand, NOW, savings & money market, and excludes time deposits. 8 Strong Core Deposit Growth Deposit Balances (In millions) Cost of Deposits 1,191 1,172 1,207 1,590 1,680 1,402 1,457 1,464 1,930 1,960 1,583 1,509 1,568 2,148 2,244 1,764 1,670 1,794 2,213 2,209 1Q16 2Q16 3Q16 4Q16 1Q17 Noninterest demand NOW Savings & Money Market Time / Other $7,881 $5,940 $5,807 $6,033 28% 27% 24% 21% $8,093 0.17% 0.18% 0.19% 0.19% 0.21% 0.42% .41% 0.41% 0.39% 0.39% 0.42% 0.42% 0.41% 0.41% 0.41% 1Q16 2Q16 3Q16 4Q16 1Q17 Core Deposits Total Cost of Deposits Contractual

 
04/21/2017 3.67% +0.07% +0.02% 4Q16 Net Loan Recovery Dec Rate Hike Compression / Other 1Q17 3.73% (0.03)% Note: See reconciliation of contractual net interest margin in appendix 9 Net Interest Margin Grows 6 bps to 3.73% Net Interest Margin (NIM) Yields and Cost of Funds 3.64% 3.62% 3.58% 3.67% 3.73% 3.16% 3.25% 3.11% 3.27% 3.34% 1Q16 2Q16 3Q16 4Q16 1Q17 GAAP NIM Contractual NIM 0.51% 0.50% 0.51% 0.49% 0.49% 4.52% 4.48% 4.40% 4.54% 4.58% 2.32% 2.35% 2.43% 2.39% 2.51% 1Q16 2Q16 3Q16 4Q16 1Q17 Loans Investments Cost of Funds NIM Drivers

 
04/21/2017 Note: See reconciliation of core non-interest income in appendix 10 Non-interest Income up Sequentially Non-interest Income (In millions) Non-interest Income Detail (In millions) $2.6 $11.9 $12.4 $17.0 $15.9 $11.7 $11.8 $12.3 $15.1 $15.8 1Q16 2Q16 3Q16 4Q16 1Q17 Non-interest Income Core Non-interest Income 1Q16 4Q16 1Q17 Services charges on deposits 4.8$ 5.9$ 5.4$ Debit card income 3.1 4.2 4.8 Fees on mortgage loans sold 1.0 1.4 1.2 Investment advisory and trust fees 0.5 0.6 0.6 FDIC indemnification asset expense (9.2) - - Securites gains 0.0 1.9 0.1 Other 2.3 3.0 3.8 Non-interest Income 2.6$ 17.0$ 15.9$ Less: Securities gains (0.0) (1.9) (0.1) Plus: FDIC IA Expense 9.2 - - Non-GAAP Core Non-interest Income 11.7$ 15.1$ 15.8$

 
04/21/2017 Note: See reconciliation of core efficiency ratio and core non-interest expense in appendix 11 Focused on Efficiency & Merger Cost Savings Efficiency Ratio Non-interest Expense Detail (In millions) 45.0 43.3 45.8 54.1 57.8 $46.9 $44.5 $47.5 $74.0 $62.7 1Q16 2Q16 3Q16 4Q16 1Q17 Core Non-interest Expense Non-GAAP Adjustments 64.0% 59.0% 50% 55% 60% 65% 70% 75% 80% 85% Efficiency Rati Core Effici ncy Ratio Target 60%

 
04/21/2017 12 Liquidity and Capital Ratios Remain Strong Tier 1 Leverage Ratio Liquidity Portfolio Loan/Deposit Ratio 12.5% 12.6% 12.9% 12.2% 11.6% 1Q16 2Q16 3Q16 4Q16 1Q17 94.9% 98.9% 98.4% 94.0% 92.8% 1Q16 2Q16 3Q16 4Q16 1Q17 Cash / Equivalents, 9.1% U.S. Agency Securities, 0.6% Equity Securities and Mutual Funds, 0.2% Corporate bonds, 8.8% Municipal bonds, 1.1% Industrial Revenue, 0.2% MBS - GSE, 80.0% 1Q17 capital ratio is preliminary

 
04/21/2017 Credit Metrics New Loan Portfolio Performing Strongly Net Charge-offs (NCOs) Past Dues & Nonaccruals 13 0.09% 0.17% 0.11% 0.23% 0.09%0.11% 0.12% 0.18% 0.18% 0.21% 1Q16 2Q16 3Q16 4Q16 1Q17 Past Due Non-Accruals1Q16 4Q16 1Q17 Criticized 0.25% 0.57% 0.69% Classified Performing 0.55% 0.37% 0.41% las ified Nonperforming 0.11% 0.18% 0.21% Total Criticized/Classified 0.91% 1.11% 1.32% Reserves / Loans 0.47% 0.41% 0.40% Reserves / NCOs 4.47x 1.72x 1.99x Reserves / Nonaccruals 4.27x 2.27x 1.91x Total LLR + Marks / Total Loan Portfolio 1.46% 1.19% 1.06% 0.12% 0.15% 0.12% 0.24% 0.20% Q16 2Q16 3Q16 4Q16 1Q17

 
04/21/2017 Special Assets Remain at Low Levels Nonperforming Loans / Total Loans 14 Special Assets (In millions) 225 201 213 195 232 230 53 49 44 46 53 51 $278 $249 $257 $241 $285 $281 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Loans REO 1.15% 1.13% 1.02% 1.01% 1Q16 2Q16 3Q16 4Q16 1 7 0.95%

 
04/21/2017 15 Appendix

 
04/21/2017 Use of Non-GAAP Financial Measures Core net income, core efficiency ratio, core return-on-assets ("core ROA"), tangible book value and tangible book value per share are each non-GAAP measures used in this report. A reconciliation to the most directly comparable GAAP financial measures - net income in the case of core net income and core ROA, total non-interest income and total non-interest expense in the case of core efficiency ratio, and total shareholders' equity in the case of tangible book value and tangible book value per share - appears in tabular form at the end of this presentation. The Company believes core net income, the core efficiency ratio and core ROA are useful for both investors and management to understand the effects of certain non-interest items and provide an alternative view of the Company's performance over time and in comparison to the Company's competitors. These measures should not be viewed as a substitute for net income. The Company believes that tangible book value and tangible book value per share are useful for both investors and management as these are measures commonly used by financial institutions, regulators and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company's capital over time and in comparison to its competitors. These measures should not be viewed as a substitute for total shareholders' equity. The Company uses these non-GAAP measures for various purposes, including measuring performance for incentive compensation and as a basis for strategic planning and forecasting. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. 16 GAAP and Non-GAAP Disclosures

 
04/21/2017 17 Reconciliation of Core Noninterest Income / Expense $ 000's 1Q17 4Q16 3Q16 2Q16 1Q16 Net interest income $82,116 $77,819 $62,627 $61,515 $61,367 Reported non-interest income 15,852 17,016 12,370 11,922 2,566 Less: Securities gains 67 1,894 71 117 40 Termination of loss share – – – – (9,178) Core non-interest income $15,785 $15,122 $12,299 $11,805 $11,704 Reported non-interest expense $62,703 $73,994 $47,530 $44,536 $46,938 Less: Severance expense – 7 – – 75 Conversion costs and merger 3,037 18,245 331 881 1,107 Legal merger non deductible – 280 61 355 580 Restructuring expense 1,912 4 (113) 5 142 Contract termination – – – – – Legal settlement – 1,361 1,500 – – Core non-interest expense $57,754 $54,097 $45,751 $43,295 $45,034 Core Fee Ratio* 16.1% 16.3% 16.4% 16.1% 16.1% Efficiency Ratio** 64.0% 78.0% 63.4% 60.6% 73.4% Core Efficiency Ratio*** 59.0% 58.2% 61.1% 59.1% 61.6% * Core Fee Ratio: Core non-interest income / (Net interest income + Core non-interest income) ** Efficiency Ratio: Non-interest expense / (Net interest income + Non-interest income) ***Core Efficiency Ratio: Core non-interest expense / (Net interest income + Core non-interest income)

 
04/21/2017 18 Reconciliation of Core Net Income $ 000's Quarter Quarter Quarter Quarter Quarter Quarter Ended Ended Ended Ended Ended Ended 1Q17 1Q17 4Q16 4Q16 1Q16 1Q16 20,883$ 20,883$ 12,434$ 12,434$ 9,840$ 9,840$ Pre-Tax After-tax Pre-Tax After-tax Pre-Tax After-tax Non-Interest Income Termination of loss share agreement 9,178 5,670 Security gains* (67) (41) (1,894) (1,170) (40) (25) Non-Interest Expense Severance expense * - - 7 4 75 46 Restructuring expense* 1,912 1,181 4 3 142 88 Conversion costs and merger tax deductible* 3,037 1,877 18,245 11,270 1,107 684 Legal merger non deductible - - 280 280 580 580 Contract Termination - - - - - - Tax adjustment - - (1,350) (1,350) - - Legal settlement* - - 1,361 841 - - Tax effect of adjustments* (1,865) NA (6,775) NA (3,999) NA 23,900$ 23,900$ 22,312$ 22,312$ 16,883$ 16,883$ Diluted shares 53,127 50,387 43,904 Core Net Income per share $0.45 $0.44 $0.38 Average Assets $9,907,560 $9,329,334 $7,450,422 Tangible Common Equity $1,042,220 $1,023,177 $848,305 ROA** 0.84% 0.53% 0.53% Core ROA*** 0.96% 0.96% 0.91% Core ROTCE**** 9.2% 8.7% 8.0% * Tax effected at an income tax rate of 38% ** ROA: Annualized net income / average assets *** Core ROA: Annualized core net income / average assets **** Core ROTCE: Annualized core net income / tangible common equity Core Net Income Net income Adjustments

 
04/21/2017 19 Tangible Book Value (In thousands, except per share data) March 31, 2017 Total common shareholders' equity $1,307,931 Less: Goodwill and core deposit intangibles, net of taxes 253,708 angible book value* $1,054,223 Common shares outstanding 51,966 Tangible book value per share $20.29 * Tangible book value is equal to book value less goodwill and core deposit intangibles, net of related deferred tax liabilities.

 
04/21/2017 1. Includes effects of tax equivalent adjustments 2. Excludes purchase accounting adjustments 20 Contractual Net Interest Margin $ 000's Average Earning Net Interest Net Interest Assets Income1 Margin March 31, 2017 Reported 8,998,422 93,518 3.73% Purchase Accounting Impact (38,782) 8,645 0.39% Contractual Net Interest Margin2 3.34% December 31, 2016 Reported 8,499,594 78,376 3.67% Purchase Accounting Impact (41,663) 8,633 0.40% Contractual Net Interest Margin2 3.27% September 30, 2016 Reported 7,009,363 63,083 3.58% Purchase Accounting Impact (33,558) 8,307 0.47% Contractual Net Interest Margin2 3.11% June 30, 2016 Reported 6,876,936 61,950 3.62% Purchase Accounting Impact (39,114) 6,438 0.37% Contractual Net Interest Margin2 3.25% March 31, 2016 Reported 6,832,335 61,786 3.64% Purchase Accounting Impact (44,537) 8,171 0.48% Contractual Net Interest Margin2 3.16%

 
04/21/2017 Owner Occupied CRE $1,313 17% C&I $1,444 19% 1-4 Resi $1,787 24% Jr. Lien / HELOC $502 7% Consumer Loans $423 6% Other $231 3% CRE Concentration well within Regulatory Guidelines 21 ■ Total CRE was 156% of total risk based capital ■ Construction & development loans were 44% of total risk based capital Portfolio by Loan Type (In millions) Non-owner Occupied CRE $1,187 16% Other C&D $350 5% Multifamily $116 1% 1-4 C&D $158 2% Commercial Real Estate Loans

 

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