Form 8-K Capital Bank Financial For: Oct 21

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 8/14/2026

1. AMAT
2. GLOB
3. SPY
4. RDDT
5. HTFL
6. SNDK
7. WDAY
8. ADYEN:NA
9. ADYYF
10. DVLT

October 21, 2015 6:36 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):  October 21, 2015



(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)
 
 
 
121 Alhambra Plaza, Suite 1601
Coral Gables, Florida 33134
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (305) 670-0200


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 October 21, 2015, Capital Bank Financial Corp. (the “Company”) issued a press release announcing its financial results for the third quarter of 2015.  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 October 21, 2015.  By press release dated October 7, 2015, 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 in the conference call is furnished as Exhibit 99.2 herewith and incorporated herein by reference.

Item 8.01
Other Events.
 
On October 21, 2015, Capital Bank Financial Corp. (the “Company”) issued a press release announcing that its Board of Directors had declared a dividend of $0.10 per share, payable on November 16, 2015, to shareholders of record on November 2, 2015.

Item 9.01
Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit 99.1
Press Release of Capital Bank Financial Corp. dated October 21, 2015.

Exhibit 99.2
Presentation for conference call to be conducted by Capital Bank Financial Corp. on October 21, 2015.
































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:
October 21, 2015
By:
/s/ Christopher G. Marshall
 
 
 
Christopher G. Marshall
Chief Financial Officer

















































Exhibit Index

Exhibit 99.1
Press Release of Capital Bank Financial Corp. dated October 21, 2015.

Exhibit 99.2
Presentation for conference call to be conducted by Capital Bank Financial Corp. on October 21, 2015.



CBF Reports Third Quarter Results
Page 1
October 21, 2015

 
EXHIBIT 99.1
 

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


 
CAPITAL BANK FINANCIAL CORP. REPORTS 3Q EPS AND RECORD CORE EPS OF $0.33


•
Net income of $15.3 million increased 18% sequentially;
•
EPS grew 18% sequentially and 22% year over year;
•
Record new loans of $490 million increased 10% year over year;
•
Loan portfolio grew 12% year over year;
•
ROA and Core ROA excluding commercial indemnification expense, increased to 0.86%, and 0.92%, respectively; and
•
Declared a $0.10 quarterly common stock dividend.


Coral Gables, Fla. (October 21, 2015) - Capital Bank Financial Corp. (Nasdaq: CBF) (the “Company”) today reported net income for the third quarter of 2015 of $15.3 million, or $0.33 per diluted share, and core net income of $15.4 million, or $0.33 per diluted share.  Net income rose 18% sequentially and 16% year over year, while net income per diluted share rose 18% and 22%, respectively.
Core adjustments for the third quarter of 2015 mainly included $0.2 million in gains on sales of facilities, offset by a $0.2 million charge related to an early termination of a technology contract and $0.1 million of severance.
Gene Taylor, Chairman and Chief Executive Officer of Capital Bank Financial Corp., commented, "The Company's improving profitability, loan growth, commencement of a dividend program, and continued stock repurchase all demonstrate our commitment to generating strong investor returns."
Chris Marshall, Chief Financial Officer of Capital Bank Financial Corp., added, "We are very pleased with our third quarter results, which include record core EPS and record new loan growth. We continue to see a consistently significant improvement in our ROA, driven by strong organic loan growth, responsible efficiency initiatives, and the benefit of reduced legacy credit expenses."


Loan Portfolio and Composition

During the third quarter, the loan portfolio increased by $198.5 million to $5.4 billion, a 15% annualized rate.  New loans of $490.2 million were partially offset by resolutions totaling $43.4 million, including transfers to OREO of $1.8 million, and principal repayments of $246.4 million.

The relative composition of the Company’s loan portfolio at the end of the third and second quarters of 2015 and fourth quarter of 2014 was as follows:










- MORE -

CBF Reports Third Quarter Results
Page 2
October 21, 2015

 
 
Sep 30,
2015
 
Jun 30,
2015
 
Dec 31,
2014
Commercial real estate
 
22
%
 
23
%
 
23
%
C&I
 
42
%
 
43
%
 
42
%
Consumer
 
33
%
 
32
%
 
32
%
Other
 
3
%
 
2
%
 
3
%
Total
 
100
%
 
100
%
 
100
%


Deposits Composition and Cost of Funds

During the third quarter, total deposits increased by $73.2 million to $5.6 billion, or a 5% annualized rate. The sequential increase included $82 million in wholesale time deposits, which provided a lower cost source of funding than higher rate legacy time deposits. The cost of core deposits remained flat at 0.15%.  Core deposits include all checking, savings and money market accounts and represent 68% of total deposits. Sequentially and year over year, the cost of total deposits increased three basis points and five basis points, respectively, to 0.39%, largely as a result of the amortization of purchase accounting. The contractual cost of total deposits, which excludes purchase accounting, increased one basis point sequentially and was flat year over year at 0.40%.

Net Interest Income and Net Interest Margin

Net interest income increased $1.0 million to $61.6 million from $60.7 million for the second quarter of 2015 and increased slightly from $61.4 million for the third quarter of 2014. The net interest margin for the third quarter of 2015 was 3.82%, a decline of twelve basis points sequentially and thirty-two basis points year over year. The sequential and year over year net interest margin decline was due to the lower average yield on new loans as compared to the yields of the Company's legacy acquired loans and the slight increase in the cost of total deposits. The implementation of interest rate swaps during the year resulted in $0.8 million in additional interest income during the third quarter and had a five basis point impact on net interest margin. New and acquired non-impaired loans represent $4.3 billion or 79% of our total loan portfolio, up from 76% and 73% at June 30, 2015 and December 31, 2014, respectively. New loans outstanding represent $3.9 billion with an average yield of 3.58%, compared to $1.1 billion of acquired impaired loans outstanding with an average yield of 8.32%.

Non-Interest Income

Non-interest income increased $1.1 million to $11.4 million from $10.4 million for the second quarter of 2015 and increased $1.5 million from $10.0 million for the third quarter of 2014. The sequential increase was mainly driven by a decline in FDIC indemnification asset amortization due to the impairment and write down of loans and OREO covered under commercial loss sharing provisions with the FDIC and higher service charges on deposits accounts, partially offset by lower fees on mortgage loans due to a decline in mortgage loan sales and a decline in investment advisory fees. Going forward, as the commercial loss sharing portion of the agreements expired during the third quarter, the Company expects FDIC loss share amortization to be significantly lower than amounts recorded in prior quarters.

The year over year increase was mainly driven by a decline in FDIC indemnification asset amortization due to impairment and write down of loans and OREO covered under commercial loss sharing agreements.

Provision for Loan and Lease Losses and Credit Quality

The provision of $0.8 million recorded for the third quarter of 2015 included a $0.3 million provision for new and acquired non-impaired loans plus an additional $0.5 million impairment due to changes in cash flow estimates for certain acquired impaired loan pools.  The changes in cash flow estimates mainly resulted from an anticipated foreclosure of a real estate development loan that was covered by the loss sharing agreement with the FDIC. Net charge-offs for the third quarter of 2015 were $2.6 million, up from $1.5 million in the second quarter of 2015. The sequential increase was due to a $1.1 million charge-off of impairment on an acquired impaired loan pool as the remaining contractual cash flows of active loans in the pool fell below its recorded investment. In such cases, the Company charges off related impairment such that the recorded investment does not exceed the contractual cash flows for the remaining active loans in the pool.


- MORE -

CBF Reports Third Quarter Results
Page 3
October 21, 2015

At September 30, 2015, the allowance for loan and lease losses was $46.3 million, of which $25.7 million related to acquired impaired loans and $20.6 million related to new and acquired non-impaired loans. The allowance for loan and lease losses represents 0.86% of the Company's total $5.4 billion loan portfolio.

At September 30, 2015, non-performing loans were $81.7 million, down 12% from June 30, 2015, and down 53%, from September 30, 2014, mainly as a result of resolutions and upgrades. Non-performing loans have declined 79% from a peak of $382.5 million at December 31, 2011. Non performing loans are comprised of $9.6 million of nonaccrual originated loans and $72.0 million of acquired impaired loans.

Non-Interest Expense

Non-interest expense declined $1.2 million to $48.3 million from $49.5 million for the second quarter of 2015 and declined $3.1 million from $51.4 million for the third quarter of 2014.  The sequential decline was mainly due to the absence of $1.4 million in second quarter charges from net losses on extinguishment of debt assumed through the Company's legacy acquisitions. Contributing to the year over year decline was a reduction in net occupancy expense as a result of cost savings initiatives, a reduction in stock-based compensation expense, and lower contingent value rights ("CVR") expense due to the early redemption of the CVR associated with Southern Community Financial Corporation.

As of September 30, 2015, covered loans and OREO subject to the non-single-family shared-loss agreements expiring during the third quarter, were $89.3 million and $6.9 million, respectively. As a result of the agreements' expiration, FDIC indemnification expense is expected to decline significantly in the fourth quarter of 2015. For the quarter ended September 30, 2015, excluding the impact of the non-single-family FDIC indemnification expense, the Company's efficiency ratio and core efficiency ratio declined to 64.84% and 64.69%, respectively, and ROA and Core ROA increased to 0.92%.

Income Tax Expense

Income tax expense was $8.6 million for the third quarter of 2015, an effective rate of 36%, compared to $7.3 million and 36% for the second quarter of 2015. Income tax expense was $8.1 million and 38% for the third quarter of 2014. The year over year decline in effective rate was mainly due to the favorable impact from higher tax-exempt interest income and lower non-deductible CVR expense in the current year.

Financial Position

Total assets increased by $206.7 million to $7.3 billion as of September 30, 2015, from $7.1 billion as of June 30, 2015.  During the quarter, the Company’s loan portfolio increased by $198.5 million to $5.4 billion, a 15% annualized rate.  Deposits increased by $73.2 million to $5.6 billion, a 5% annualized rate, and FHLB borrowings increased $165.0 million. Tangible book value per share was $19.75 as of September 30, 2015, an increase of $0.06 and $0.75 over June 30, 2015 and September 30, 2014, respectively. During the third quarter, the Company repurchased 2.0 million shares of common stock for $59.6 million at an average price of $29.94. The Company has $42.2 million remaining under the current stock repurchase authorization.

The Company’s national bank subsidiary, Capital Bank N.A., has preliminary Tier 1 Leverage, Tier 1 Common, Tier 1 Risk-Based and Total Risk-Based capital ratios of 11.19%, 12.85%, 12.85% and 13.69%, respectively, as of September 30, 2015, under currently applicable regulations.

The Company declared a cash dividend of $0.10 per share, payable on November 16, 2015, to shareholders of record as of November 2, 2015.

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 (719) 457-2727, and the confirmation pass code is 256369. Please dial in 10 minutes prior to the beginning of the call. A telephonic replay of the conference call will be available through October 29, 2015, by dialing (719) 457-0820 and entering pass code 256369. 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.




- MORE -

CBF Reports Third Quarter Results
Page 4
October 21, 2015


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 total shareholders’ equity.

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.

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 $7.3 billion in total assets as of September 30, 2015, and 153 full-service banking offices throughout Florida, North and South Carolina, Tennessee and Virginia. To learn more about Capital Bank, N.A., please visit www.capitalbank-us.com. 


- MORE -

CBF Reports Third Quarter Results
Page 5
October 21, 2015

 CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share data)
(Unaudited)
 
Three Months Ended
 
Sep 30,
2015
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
Interest and dividend income
$
68,718

 
$
67,311

 
$
66,046

 
$
67,750

 
$
67,643

Interest expense
7,081

 
6,626

 
6,317

 
6,399

 
6,218

Net Interest Income
61,637

 
60,685

 
59,729

 
61,351

 
61,425

Provision (reversal) for loan and lease losses
799

 
1,299

 
(841
)
 
(637
)
 
(1,332
)
Net interest income after provision (reversal) for loan and lease losses
60,838

 
59,386

 
60,570

 
61,988

 
62,757

Non-Interest Income
 
 
 

 
 

 
 

 
 

Service charges on deposit accounts
5,472

 
5,189

 
4,705

 
5,390

 
5,565

Debit card income
3,113

 
3,176

 
2,964

 
3,013

 
3,017

Fees on mortgage loans originated and sold
990

 
1,278

 
1,147

 
1,053

 
1,195

Investment advisory and trust fees
860

 
1,125

 
1,006

 
1,170

 
1,183

FDIC indemnification asset expense
(1,418
)
 
(2,499
)
 
(2,439
)
 
(3,421
)
 
(3,881
)
Investment securities gains (losses), net
(43
)
 
231

 
90

 
513

 
317

Other-than-temporary impairment loss on investments:
 
 
 
 
 
 
 
 
 
Gross impairment loss
—

 
(288
)
 
—

 
—

 
—

Less: Impairment recognized in other comprehensive income
—

 
—

 
—

 
—

 
—

Net impairment loss recognized in earnings
—

 
(288
)
 
—

 
—

 
—

Other income
2,444

 
2,151

 
2,447

 
2,876

 
2,561

Total non-interest income
11,418

 
10,363

 
9,920

 
10,594

 
9,957

Non-Interest Expense
 
 
 
 
 
 
 
 
 

Salaries and employee benefits
22,620

 
21,881

 
23,881

 
23,871

 
22,590

Stock-based compensation expense
309

 
108

 
284

 
451

 
443

Net occupancy and equipment expense
7,621

 
7,754

 
8,129

 
8,020

 
8,475

Computer services
3,471

 
3,343

 
3,397

 
3,413

 
3,332

Software expense
2,198

 
2,082

 
2,142

 
2,074

 
1,932

Telecommunication expense
1,515

 
1,367

 
1,380

 
1,347

 
1,406

OREO valuation expense
2,075

 
1,710

 
1,390

 
1,554

 
2,752

Net losses (gains) on sales of OREO
(351
)
 
(957
)
 
(7
)
 
(419
)
 
(223
)
Foreclosed asset related expense
872

 
600

 
674

 
619

 
845

Loan workout expense
194

 
795

 
623

 
1,352

 
911

Professional fees
1,958

 
1,723

 
1,734

 
2,116

 
1,532

Losses on extinguishment of debt
—

 
1,438

 
—

 
—

 
—

Restructuring charges, net
23

 
178

 
2,341

 
—

 
—

Contingent value right expense
—

 
4

 
116

 
334

 
278

Regulatory assessments
1,423

 
1,831

 
1,695

 
1,705

 
1,637

Other expense
4,418

 
5,645

 
4,868

 
4,495

 
5,508

Total non-interest expense
48,346

 
49,502

 
52,647

 
50,932

 
51,418

Income before income taxes
23,910

 
20,247

 
17,843

 
21,650

 
21,296

Income tax expense
8,589

 
7,257

 
6,454

 
7,814

 
8,053

Net income
$
15,321

 
$
12,990

 
$
11,389

 
$
13,836

 
$
13,243

 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.34

 
$
0.28

 
$
0.25

 
$
0.29

 
$
0.28

Diluted
$
0.33

 
$
0.28

 
$
0.24

 
$
0.29

 
$
0.27

 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
45,359

 
45,913

 
46,294

 
46,964

 
47,912

Diluted
46,534

 
47,220

 
47,632

 
48,243

 
49,069


- MORE -

CBF Reports Third Quarter Results
Page 6
October 21, 2015

CAPITAL BANK FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)
(Unaudited)
 
Sep 30,
2015
 
Jun 30,
2015
 
Dec 31,
2014
Assets
 
 
 
 
 
Cash and due from banks
$
80,642

 
$
93,637

 
$
106,193

Interest-bearing deposits in other banks
53,947

 
107,649

 
81,942

Total cash and cash equivalents
134,589

 
201,286

 
188,135

Trading securities
2,893

 
2,898

 
2,410

Investment securities available-for-sale at fair value (amortized cost $640,447,
 
 
 
 
 
$600,053 and $554,488, respectively)
647,423

 
600,138

 
555,893

Investment securities held-to-maturity at amortized cost (fair value $475,428,
 
 
 
 
 
$431,764 and $443,379, respectively)
467,544

 
426,427

 
436,962

Loans held for sale
8,515

 
7,127

 
5,516

Loans, net of deferred loan costs and fees
5,396,429

 
5,199,287

 
4,994,703

Less: Allowance for loan and lease losses
46,278

 
48,063

 
50,211

Loans, net
5,350,151

 
5,151,224

 
4,944,492

Other real estate owned
54,691

 
63,737

 
77,626

FDIC indemnification asset
9,789

 
11,764

 
16,762

Receivable from FDIC
1,052

 
2,652

 
3,661

Premises and equipment, net
161,342

 
163,070

 
173,176

Goodwill
134,522

 
134,522

 
134,522

Intangible assets, net
16,045

 
16,995

 
18,897

Deferred income tax asset, net
104,950

 
117,151

 
129,624

Other assets
167,690

 
155,510

 
143,734

Total Assets
$
7,261,196

 
$
7,054,501

 
$
6,831,410

Liabilities and Shareholders’ Equity
 
 
 

 
 

Liabilities
 
 
 

 
 

Deposits:
 
 
 

 
 

Non-interest bearing demand
$
1,099,252

 
$
1,132,085

 
$
1,054,128

Interest bearing demand
1,251,365

 
1,367,123

 
1,383,990

Money market
1,005,406

 
991,520

 
898,254

Savings
436,385

 
479,885

 
500,028

Time deposits
1,773,170

 
1,521,810

 
1,418,700

Total deposits
5,565,578

 
5,492,423

 
5,255,100

Federal Home Loan Bank advances
520,947

 
355,995

 
296,091

Short-term borrowings
16,708

 
18,466

 
23,407

Long-term borrowings
85,230

 
84,688

 
139,681

Accrued expenses and other liabilities
50,091

 
43,583

 
53,557

Total liabilities
$
6,238,554

 
$
5,995,155

 
$
5,767,836

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, 37,178
 
 
 
 
 
issued and 27,912 outstanding, 37,160 issued 29,886 outstanding and 36,936 issued and 30,150 outstanding, respectively.
372

 
372

 
370

Common stock-Class B $0.01 par value: 200,000 shares authorized, 18,327
 
 
 
 
 
issued and 16,554 outstanding, 18,327 issued and 16,554 outstanding and 18,743 issued and 17,443 outstanding, respectively.
183

 
183

 
187

Additional paid in capital
1,079,229

 
1,078,740

 
1,081,628

Retained earnings
198,103

 
182,782

 
158,403

Accumulated other comprehensive (loss) income
2,578

 
(4,545
)
 
(3,824
)
Treasury stock, at cost, 11,039, 9,047 and 8,086 shares, respectively
(257,823
)
 
(198,186
)
 
(173,190
)
Total shareholders’ equity
1,022,642

 
1,059,346

 
1,063,574

Total Liabilities and Shareholders’ Equity
$
7,261,196

 
$
7,054,501

 
$
6,831,410

 

- MORE -

CBF Reports Third Quarter Results
Page 7
October 21, 2015

CAPITAL BANK FINANCIAL CORP.
KEY METRICS
(Dollars in thousands)
(Unaudited)
 
Three Months Ended
 
Sep 30,
2015
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
Performance Ratios
 
 
 
 
 
 
 
 
 
Interest rate spread
3.68
%
 
3.79
%
 
3.83
%
 
3.92
%
 
4.01
%
Net interest margin
3.82
%
 
3.94
%
 
3.96
%
 
4.05
%
 
4.14
%
Return on average assets
0.86
%
 
0.75
%
 
0.66
%
 
0.82
%
 
0.80
%
Return on average shareholders' equity
5.85
%
 
4.90
%
 
4.29
%
 
5.21
%
 
4.95
%
Efficiency ratio
66.18
%
 
69.67
%
 
75.59
%
 
70.79
%
 
72.03
%
Average interest-earning assets to average interest-bearing liabilities
132.10
%
 
133.39
%
 
131.94
%
 
131.89
%
 
131.43
%
Average loans receivable to average deposits
96.01
%
 
94.12
%
 
95.47
%
 
93.94
%
 
92.32
%
Yield on interest-earning assets
4.26
%
 
4.36
%
 
4.38
%
 
4.47
%
 
4.56
%
Cost of interest-bearing liabilities
0.58
%
 
0.57
%
 
0.55
%
 
0.55
%
 
0.55
%
Asset and Credit Quality Ratios-Total Loans
 

 
 

 
 

 
 

 
 

Non-accrual loans
$
9,647

 
$
9,807

 
$
11,482

 
$
9,484

 
$
10,590

Nonperforming acquired loans
$
72,023

 
$
83,515

 
$
115,865

 
$
121,137

 
$
161,670

Nonperforming loans to loans receivable
1.51
%
 
1.79
%
 
2.51
%
 
2.61
%
 
3.57
%
Nonperforming assets to total assets
1.88
%
 
2.23
%
 
2.85
%
 
3.05
%
 
3.93
%
Covered loans to total gross loans
1.45
%
 
3.39
%
 
3.71
%
 
3.95
%
 
4.58
%
ALLL to nonperforming assets
33.88
%
 
30.56
%
 
24.22
%
 
24.09
%
 
19.92
%
ALLL to total gross loans
0.86
%
 
0.92
%
 
0.95
%
 
1.00
%
 
1.08
%
Annualized net charge-offs/average loans
0.20
%
 
0.12
%
 
0.09
%
 
0.12
%
 
0.14
%
Asset and Credit Quality Ratios-New Loans
 

 
 

 
 

 
 

 
 

Nonperforming new loans to total new loans receivable
0.17
%
 
0.19
%
 
0.22
%
 
0.16
%
 
0.22
%
New loans ALLL to total gross new loans
0.51
%
 
0.59
%
 
0.61
%
 
0.63
%
 
0.72
%
Asset and Credit Quality Ratios-Acquired Loans
 
 
 
 
 
 
 
 
 

Nonperforming acquired loans to total acquired loans receivable
5.21
%
 
5.58
%
 
7.30
%
 
7.28
%
 
9.11
%
Covered acquired loans to total gross acquired loans
5.45
%
 
11.38
%
 
11.47
%
 
11.47
%
 
11.84
%
Acquired loans ALLL to total gross acquired loans
1.80
%
 
1.71
%
 
1.67
%
 
1.71
%
 
1.67
%
Capital Ratios (Company)
 

 
 

 
 

 
 

 
 

Total average shareholders' equity to total average assets
14.79
%
 
15.41
%
 
15.48
%
 
15.72
%
 
16.14
%
Tangible common equity ratio (1)
12.26
%
 
13.15
%
 
13.22
%
 
13.63
%
 
13.93
%
Tier 1 leverage capital ratio (2)
13.60
%
 
14.66
%
 
14.42
%
 
14.28
%
 
14.40
%
Tier 1 common capital ratio (2)
14.44
%
 
16.07
%
 
16.42
%
 
N/A

 
N/A

Tier 1 risk-based capital ratio (2)
15.60
%
 
17.33
%
 
17.70
%
 
18.00
%
 
18.40
%
Total risk-based capital ratio (2)
16.38
%
 
18.18
%
 
18.66
%
 
19.05
%
 
19.52
%
Capital Ratios (Bank)
 

 
 

 
 

 
 

 
 

Tangible common equity ratio (1)
11.36
%
 
11.35
%
 
11.32
%
 
14.29
%
 
14.31
%
Tier 1 leverage capital ratio (2)
11.19
%
 
11.15
%
 
10.89
%
 
13.52
%
 
13.37
%
Tier 1 common capital ratio (2)
12.85
%
 
13.18
%
 
13.34
%
 
N/A

 
N/A

Tier 1 risk-based capital ratio (2)
12.85
%
 
13.18
%
 
13.34
%
 
17.04
%
 
17.08
%
Total risk-based capital ratio (2)
13.69
%
 
14.10
%
 
14.30
%
 
18.09
%
 
18.20
%

(1) See "Reconciliation of Non-GAAP Measures"
(2) September 30, 2015 regulatory capital ratios are preliminary. The Company became subject to Basel III capital rules on January 1, 2015.

- MORE -

CBF Reports Third Quarter Results
Page 8
October 21, 2015

CAPITAL BANK FINANCIAL CORP.
LOANS AND DEPOSITS
(Dollars in thousands)
(Unaudited)
 
Sep 30,
2015
 
Jun 30,
2015
 
Mar 30,
2015
 
Dec 31,
2014
 
Sep 30,
2014
Loans
 
 
 
 
 
 
 
 
 
Non-owner occupied commercial real estate
$
847,225

 
$
834,351

 
$
823,763

 
$
798,556

 
$
797,197

Other commercial construction and land
192,283

 
182,283

 
180,166

 
200,755

 
243,563

Multifamily commercial real estate
82,762

 
76,754

 
88,980

 
89,132

 
71,119

1-4 family residential construction and land
87,193

 
78,572

 
66,547

 
68,658

 
76,442

Total commercial real estate
1,209,463

 
1,171,960

 
1,159,456

 
1,157,101

 
1,188,321

Owner occupied commercial real estate
1,065,875

 
1,030,111

 
1,038,493

 
1,046,736

 
1,026,853

Commercial and industrial
1,219,101

 
1,181,451

 
1,125,708

 
1,073,791

 
959,641

Lease financing
1,488

 
1,661

 
1,834

 
2,005

 
2,175

Total commercial
2,286,464

 
2,213,223

 
2,166,035

 
2,122,532

 
1,988,669

1-4 family residential
985,982

 
959,224

 
928,832

 
925,698

 
913,219

Home equity loans
373,993

 
375,271

 
379,946

 
378,475

 
373,604

Other consumer loans
401,324

 
341,590

 
296,753

 
272,453

 
242,451

Total consumer
1,761,299

 
1,676,085

 
1,605,531

 
1,576,626

 
1,529,274

Other
147,718

 
145,146

 
146,987

 
143,960

 
117,507

Total loans
$
5,404,944

 
$
5,206,414

 
$
5,078,009

 
$
5,000,219

 
$
4,823,771

 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 

 
 
 
 

 
 
Non-interest bearing demand
$
1,099,252

 
$
1,132,085

 
$
1,114,423

 
$
1,054,128

 
$
1,006,556

Interest bearing demand
1,251,365

 
1,367,123

 
1,405,390

 
1,383,990

 
1,309,839

Money market
1,005,406

 
991,520

 
924,228

 
898,254

 
914,226

Savings
436,385

 
479,885

 
491,394

 
500,028

 
514,729

Total core deposits
3,792,408

 
3,970,613

 
3,935,435

 
3,836,400

 
3,745,350

Time deposits
1,773,170

 
1,521,810

 
1,428,121

 
1,418,700

 
1,430,106

Total deposits
$
5,565,578

 
$
5,492,423

 
$
5,363,556

 
$
5,255,100

 
$
5,175,456

 



- MORE -

CBF Reports Third Quarter Results
Page 9
October 21, 2015

CAPITAL BANK FINANCIAL CORP.
LEGACY CREDIT EXPENSES
(Dollars in thousands)
(Unaudited)
 
Three Months Ended
 
Sep 30,
2015
 
Jun 30, 2015
 
Mar 31, 2015
 
Dec 31, 2014
 
Sep 30,
2014
Provision (reversal) on legacy loans
$
492

 
$
(523
)
 
$
(1,926
)
 
$
(1,411
)
 
$
(4,205
)
FDIC indemnification asset expense
1,418

 
2,499

 
2,439

 
3,421

 
3,881

OREO valuation expense
2,075

 
1,710

 
1,390

 
1,554

 
2,752

Net losses (gains) on sales of OREO
(351
)
 
(957
)
 
(7
)
 
(419
)
 
(223
)
Foreclosed asset related expense
872

 
600

 
674

 
619

 
845

Loan workout expense
194

 
795

 
623

 
1,352

 
911

Salaries and employee benefits
797

 
796

 
832

 
993

 
1,054

Total legacy credit expenses
$
5,497

 
$
4,920

 
$
4,025

 
$
6,109

 
$
5,015

 



- MORE -

CBF Reports Third Quarter Results
Page 10
October 21, 2015

CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
 
Three Months Ended 
September 30, 2015
 
Three Months Ended 
June 30, 2015
 
 
Average
Balances
 
Interest
 
Yield/Rate
 
Average
Balances
 
Interest
 
Yield/Rate
Interest earning assets
 
 
 
 
 
 
 
 
 
 
 
 
Loans (1)
 
$
5,261,793

 
$
62,461

 
4.71
%
 
$
5,079,878

 
$
61,717

 
4.87
%
Investment securities (1)
 
1,088,818

 
5,885

 
2.14
%
 
1,038,269

 
5,296

 
2.05
%
Interest bearing deposits in other banks
 
36,596

 
19

 
0.21
%
 
55,553

 
36

 
0.26
%
Other earning assets (2)
 
54,960

 
760

 
5.49
%
 
47,694

 
646

 
5.43
%
Total interest earning assets
 
6,442,167

 
$
69,125

 
4.26
%
 
6,221,394

 
$
67,695

 
4.36
%
Non-interest earning assets
 
645,715

 
 
 
 
 
664,119

 
 
 
 
Total assets
 
$
7,087,882

 
 
 
 
 
$
6,885,513

 
 
 
 
Interest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
1,642,745

 
$
3,957

 
0.96
%
 
$
1,464,552

 
$
3,402

 
0.93
%
Money market
 
977,273

 
658

 
0.27
%
 
943,160

 
600

 
0.26
%
Interest bearing demand
 
1,291,439

 
540

 
0.17
%
 
1,381,609

 
578

 
0.17
%
Savings
 
452,058

 
241

 
0.21
%
 
484,622

 
259

 
0.21
%
Total interest bearing deposits
 
4,363,515

 
5,396

 
0.49
%
 
4,273,943

 
4,839

 
0.45
%
Short-term borrowings and FHLB advances
 
428,249

 
272

 
0.25
%
 
261,030

 
143

 
0.22
%
Long-term borrowings
 
84,922

 
1,413

 
6.60
%
 
129,029

 
1,645

 
5.11
%
Total interest bearing liabilities
 
4,876,686

 
7,081

 
0.58
%
 
4,664,002

 
6,627

 
0.57
%
Non-interest bearing demand
 
1,116,757

 
 
 
 
 
1,123,466

 
 
 
 
Other liabilities
 
46,117

 
 
 
 
 
36,966

 
 
 
 
Shareholders’ equity
 
1,048,322

 
 
 
 
 
1,061,079

 
 
 
 
Total liabilities and shareholders’ equity
 
$
7,087,882

 
 
 
 
 
$
6,885,513

 
 
 
 
Net interest income and spread
 
 
 
$
62,044

 
3.68
%
 
 
 
$
61,068

 
3.79
%
Net interest margin
 
 
 
 
 
3.82
%
 
 
 
 
 
3.94
%

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















- MORE -

CBF Reports Third Quarter Results
Page 11
October 21, 2015

CAPITAL BANK FINANCIAL CORP.
QUARTERLY AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
 
Three Months Ended 
September 30, 2015
 
Three Months Ended 
September 30, 2014
 
 
Average
Balances
 
Interest
 
Yield/Rate
 
Average
Balances
 
Interest
 
Yield/Rate
Interest earning assets
 
 
 
 
 
 
 
 
 
 
 
 
Loans (1)
 
$
5,261,793

 
$
62,461

 
4.71
%
 
$
4,762,260

 
$
62,095

 
5.17
%
Investment securities (1)
 
1,088,818

 
5,885

 
2.14
%
 
1,064,710

 
5,160

 
1.92
%
Interest bearing deposits in other banks
 
36,596

 
19

 
0.21
%
 
38,857

 
19

 
0.19
%
Other earning assets (2)
 
54,960

 
760

 
5.49
%
 
45,774

 
604

 
5.24
%
Total interest earning assets
 
6,442,167

 
$
69,125

 
4.26
%
 
5,911,601

 
$
67,878

 
4.56
%
Non-interest earning assets
 
645,715

 
 
 
 
 
725,578

 
 
 
 
Total assets
 
$
7,087,882

 
 
 
 
 
$
6,637,179

 
 
 
 
Interest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
1,642,745

 
$
3,957

 
0.96
%
 
$
1,372,696

 
$
2,983

 
0.86
%
Money market
 
977,273

 
658

 
0.27
%
 
935,223

 
552

 
0.23
%
Interest bearing demand
 
1,291,439

 
540

 
0.17
%
 
1,313,693

 
537

 
0.16
%
Savings
 
452,058

 
241

 
0.21
%
 
525,854

 
289

 
0.22
%
Total interest bearing deposits
 
4,363,515

 
$
5,396

 
0.49
%
 
4,147,466

 
$
4,361

 
0.42
%
Short-term borrowings and FHLB advances
 
428,249

 
272

 
0.25
%
 
214,122

 
125

 
0.23
%
Long-term borrowings
 
84,922

 
1,413

 
6.60
%
 
136,353

 
1,732

 
5.04
%
Total interest bearing liabilities
 
4,876,686

 
7,081

 
0.58
%
 
4,497,941

 
6,218

 
0.55
%
Non-interest bearing demand
 
1,116,757

 
 
 
 
 
1,010,817

 
 
 
 
Other liabilities
 
46,117

 
 
 
 
 
57,430

 
 
 
 
Shareholders’ equity
 
1,048,322

 
 
 
 
 
1,070,991

 
 
 
 
Total liabilities and shareholders’ equity
 
$
7,087,882

 
 
 
 
 
$
6,637,179

 
 
 
 
Net interest income and spread
 
 
 
$
62,044

 
3.68
%
 
 
 
$
61,660

 
4.01
%
Net interest margin
 
 
 
 
 
3.82
%
 
 
 
 
 
4.14
%
 
(1) Presented on a fully tax equivalent basis
(2) Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stocks 






- MORE -

CBF Reports Third Quarter Results
Page 12
October 21, 2015

CAPITAL BANK FINANCIAL CORP.
YEAR TO DATE AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
(Unaudited)
 
 
Nine Months Ended 
September 30, 2015
 
Nine Months Ended 
September 30, 2014
 
 
Average
Balances
 
Interest
 
Yield/Rate
 
Average
Balances
 
Interest
 
Yield/Rate
Interest earning assets
 
 
 
 
 
 
 
 
 
 
 
 
Loans (1)
 
$
5,129,607

 
$
184,889

 
4.82
%
 
$
4,633,424

 
$
187,325

 
5.41
%
Investment securities (1)
 
1,047,451

 
16,324

 
2.08
%
 
1,088,570

 
14,608

 
1.79
%
Interest bearing deposits in other banks
 
50,187

 
88

 
0.23
%
 
49,487

 
81

 
0.22
%
Other earning assets (2)
 
51,167

 
2,093

 
5.47
%
 
43,091

 
1,763

 
5.47
%
Total interest earning assets
 
6,278,412

 
$
203,394

 
4.33
%
 
5,814,572

 
$
203,777

 
4.69
%
Non-interest earning assets
 
665,016

 
 
 
 
 
758,525

 
 
 
 
Total assets
 
$
6,943,428

 
 
 
 
 
$
6,573,097

 
 
 
 
Interest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
1,506,488

 
$
10,357

 
0.92
%
 
$
1,381,485

 
$
8,834

 
0.85
%
Money market
 
945,170

 
1,811

 
0.26
%
 
938,560

 
1,602

 
0.23
%
Interest bearing demand
 
1,356,300

 
1,710

 
0.17
%
 
1,319,416

 
1,631

 
0.17
%
Savings
 
477,698

 
765

 
0.21
%
 
530,005

 
857

 
0.22
%
Total interest bearing deposits
 
4,285,656

 
$
14,643

 
0.46
%
 
4,169,466

 
$
12,924

 
0.41
%
Short-term borrowings and FHLB advances
 
336,791

 
597

 
0.24
%
 
139,063

 
246

 
0.24
%
Long-term borrowings
 
116,922

 
4,784

 
5.47
%
 
135,837

 
5,154

 
5.07
%
Total interest bearing liabilities
 
4,739,369

 
20,024

 
0.56
%
 
4,444,366

 
18,324

 
0.55
%
Non-interest bearing demand
 
1,102,393

 
 
 
 
 
985,445

 
 
 
 
Other liabilities
 
44,891

 
 
 
 
 
53,082

 
 
 
 
Shareholders’ equity
 
1,056,775

 
 
 
 
 
1,090,204

 
 
 
 
Total liabilities and shareholders’ equity
 
$
6,943,428

 
 
 
 
 
$
6,573,097

 
 
 
 
Net interest income and spread
 
 
 
$
183,370

 
3.77
%
 
 
 
$
185,453

 
4.14
%
Net interest margin
 
 
 
 
 
3.90
%
 
 
 
 
 
4.26
%
 
(1) Presented on a fully tax equivalent basis
(2) Includes Federal Reserve Bank, Federal Home Loan Bank and Bankers Bank stocks 


- MORE -

CBF Reports Third Quarter Results
Page 13
October 21, 2015

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

CORE NET INCOME
 
Three Months Ended
 
 
Sep 30, 2015
 
Jun 30, 2015
 
Dec 31, 2014
Net Income
 
$
15,321

 
$
15,321

 
$
12,990

 
$
12,990

 
$
13,836

 
$
13,836

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

 
 

 
 

 
 

 
 

 
 

Non-interest income
 
 

 
 

 
 

 
 

 
 

 
 

Security losses (gains)*
 
43

 
26

 
57

 
35

 
(513
)
 
(313
)
Non-interest expense
 
 
 
 
 
 
 
 
 
 

 
 

Stock-based compensation expense*
 
—

 
—

 
—

 
—

 
239

 
146

Contingent value right expense
 
—

 
—

 
4

 
2

 
334

 
334

Severance expense*
 
63

 
39

 
14

 
9

 
—

 
—

Loss on extinguishment of debt*
 
—

 
—

 
1,438

 
887

 
—

 
—

Restructuring charges*
 
23

 
14

 
178

 
110

 
—

 
—

Tax effect of adjustments*
 
(50
)
 
N/A

 
(648
)
 
N/A

 
107

 
N/A

Core Net Income
 
$
15,400

 
$
15,400

 
$
14,033

 
$
14,033

 
$
14,003

 
$
14,003

 
 
 
 
 
 
 
 
 
 
 
 
 
Less: FDIC indemnification asset expense (non-single family) *
 
$
964

 
 
 
$
1,397

 
 
 
 
 
 
Average Assets
 
$
7,087,882

 
 

 
$
6,885,513

 
 

 
$
6,749,124

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
ROA**
 
0.86
%
 


 
0.75
%
 


 
0.82
%
 


Core ROA***
 
0.87
%
 
 
 
0.82
%
 
 
 
0.83
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ROA** (excluding FDIC indemnification asset expense)
 
0.92
%
 


 
0.84
%
 


 


 


Core ROA*** (excluding FDIC indemnification asset expense)
 
0.92
%
 
 
 
0.90
%
 
 
 


 
 

* Tax effected at an income tax rate of 36%
** ROA: Annualized net income / Average assets
*** Core ROA: Annualized core net income / Average assets

















- MORE -

CBF Reports Third Quarter Results
Page 14
October 21, 2015

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

CORE EFFICIENCY RATIO
Three Months Ended
 
Sep 30,
2015
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
Net interest income
$
61,637

 
$
60,685

 
$
59,729

 
$
61,351

 
$
61,425

 
 
 
 
 
 
 
 
 
 
Reported non-interest income
$
11,418

 
$
10,363

 
$
9,920

 
$
10,594

 
$
9,957

Less: Securities gains (losses)
(43
)
 
(57
)
 
90

 
513

 
317

Core non-interest income
$
11,461

 
$
10,420

 
$
9,830

 
$
10,081

 
$
9,640

 
 
 
 
 
 
 
 
 
 
Reported non-interest expense
$
48,346

 
$
49,502

 
$
52,647

 
$
50,932

 
$
51,418

Less: Stock-based compensation expense
—

 
—

 
95

 
239

 
242

Contingent value right expense
—

 
4

 
116

 
334

 
278

Severance expense
63

 
14

 
111

 
—

 
—

Loss on extinguishment of debt
—

 
1,438

 
—

 
—

 
—

Restructuring charges
23

 
178

 
2,341

 
—

 
—

Core non-interest expense
$
48,260

 
$
47,868

 
$
49,984

 
$
50,359

 
$
50,898

 
 
 
 
 
 
 
 
 
 
Less: FDIC indemnification asset expense (non-single family)
$
1,506

 
$
2,253

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio*
66.18
%
 
69.67
%
 
75.59
%
 
70.79
%
 
72.03
%
Core efficiency ratio**
66.02
%
 
67.32
%
 
71.86
%
 
70.50
%
 
71.62
%
 
 
 
 
 
 
 
 
 
 
Efficiency ratio* (excluding FDIC indemnification expense)
64.84
%
 
67.53
%
 


 


 


Core efficiency ratio** (excluding FDIC indemnification asset expense)
64.69
%
 
65.25
%
 


 


 


  
* 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 Third Quarter Results
Page 15
October 21, 2015

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
 
 
Sep 30,
2015
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
Total shareholders' equity
 
$
1,022,642

 
$
1,059,346

 
$
1,054,349

 
$
1,063,574

 
$
1,064,939

Less: goodwill and intangible assets, net of taxes
 
(144,447
)
 
(145,035
)
 
(145,622
)
 
(146,168
)
 
(146,671
)
Tangible book value*
 
$
878,195

 
$
914,311

 
$
908,727

 
$
917,406

 
$
918,268

Common shares outstanding
 
44,466

 
46,440

 
46,632

 
47,593

 
48,331

Tangible book value per share
 
$
19.75

 
$
19.69

 
$
19.49

 
$
19.28

 
$
19.00


* 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
 
 
Sep 30,
2015
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
Total shareholders' equity
 
$
1,022,642

 
$
1,059,346

 
$
1,054,349

 
$
1,063,574

 
$
1,064,939

Less: goodwill and intangible assets
 
(150,567
)
 
(151,517
)
 
(152,465
)
 
(153,419
)
 
(154,387
)
Tangible common equity
 
$
872,075

 
$
907,829

 
$
901,884

 
$
910,155

 
$
910,552

Total assets
 
$
7,261,196

 
$
7,054,501

 
$
6,976,736

 
$
6,831,410

 
$
6,690,299

Less: goodwill and intangible assets
 
(150,567
)
 
(151,517
)
 
(152,465
)
 
(153,419
)
 
(154,387
)
Tangible assets
 
$
7,110,629

 
$
6,902,984

 
$
6,824,271

 
$
6,677,991

 
$
6,535,912

Tangible common equity ratio
 
12.26
%
 
13.15
%
 
13.22
%
 
13.63
%
 
13.93
%


- END -

2015 Third Quarter Earnings October 21, 2015

 
Safe Harbor Statement 2 10/21/2015 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 presentation 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 presentation. 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.

 
3 We’ve Built One Bank out of Seven Acquisitions 10/21/2015 TN KY NC GA SC AL WV VA FL 0 Gulf of Mexico Nashville ill ill ill Winston-Salem i - l i - l i - l Knoxville ill ill ill Naples l l l Miami Charlotte Ch rlottrlott rlott rlottrlott Raleigh l i l i l i Charleston rl rl rl Columbia Colu bi i

 
4 Significantly Improving Returns 10/21/2015 * Excluding commercial FDIC indemnification asset expense See reconciliation of non-GAAP measures in appendix. Core ROTCE Steady Progress Toward Core ROA Goal 0.92%* 0% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% 1.0% 7.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

 
5 Third Quarter Highlights ■ Reported EPS and record core EPS of $0.33, up 22% y/y ■ Record $490 million of new loans, up 10% y/y ■ Total loans up 15% annualized q/q and 12% y/y ■ Noninterest expense down 6% y/y, with core efficiency ratio declining to 65%* ■ Core ROA improved to 0.92%* ■ De novo operating agreement lifted ■ Repurchased 2.0 million shares, declared common dividend of $0.10 10/21/2015 * Excluding commercial FDIC indemnification asset expense See reconciliation of non-GAAP measures in appendix.

 
Third Quarter Financial Summary 6 10/21/2015 * Excluding commercial FDIC indemnification asset expense. See reconciliation of non-GAAP measures in appendix. ■ Net interest income increased by $1.0 million sequentially ■ Noninterest income improved by $1.1 million reflecting reduction in FDIC indemnification expense ■ Tangible book value per share increased $0.06 to $19.75 ($ mm's except per share data, growth rates, and metrics) 3Q15 2Q15 3Q14 Net interest income 61.6 2% 0% Provision (reversal) 0.8 -38% -160% Non-interest income 11.4 10% 15% Non-interest expense 48.3 -2% -6% Pretax income 23.9 18% 12% Net income 15.3 18% 16%-100 Per share $0.33 20% 22% Core adjustments 0.1 -92% -66% Core Net Income 15.4 10% 14% Per share $0.33 10% 22% Key Metrics 3Q15 2Q15 3Q14 Net interest margin 3.82% 3.94% 4.14% Core fee ratio 15.7% 14.7% 13.6% Core efficiency rati * 64.7% 65.3% Core ROA* 0.92% 0.90% Core ROTCE 7.1% 6.2% 5.9% % change

 
Working on Closing the Gap to 1.0% 7 10/21/2015 Core Return on Average Assets ■ Indemnification asset amortization significantly reduced in 4Q ■ Loan growth offsets margin compression ■ Provision normalized ■ Impact of completed initiatives and legacy credit savings ■ New cost and revenue initiatives to close remaining gap Profitability Drivers 0.87% 3Q 15 In de m ni fic at io n A m or tiz at io n * R ev en u e ne t o f Pr ov is io n C os t S av in gs T ar ge t 1.00% 0.92% -0.05% +0.11% * Excluding commercial FDIC indemnification asset expense. See reconciliation of non-GAAP measures in appendix.

 
Record $490 mm New Loans, Up 10% Y/Y 8 10/21/2015 New Loans by Geography New Loans by Product $ mm’s $ mm’s 176 233 139 210 160 101 83 65 91 126 168 141 112 188 204 $445 $457 $316 $489 $490 3Q14 4Q14 1Q15 2Q15 3Q15 Commercial CRE Consumer 159 87 92 161 155 162 196 138 200 234 124 175 86 128 101 $445 $457 $316 $489 $490 3Q14 4Q14 1Q15 2Q15 3Q15 Florida Carolinas Tennessee

 
Deposits Up 8% Y/Y With Contractual Costs Flat 9 10/21/2015 Cost of Deposits Deposit Balances $ mm’s 1,006 1,054 1,115 1,132 1,099 1,310 1,384 1,405 1,367 1,252 1,429 1,398 1,416 1,471 1,442 1,430 1,419 1,428 1,522 1,773 5,175 5,255 5,364 5,492 5,566 3Q14 4Q14 1Q15 2Q15 3Q15 Noninterest demand NOW Savings & Money Market Time Deposits Y/Y Growth 8% 1% -5% 9% 24% 0.34% 0.34% 0.34% 0.36% 0.39% 0.14% 0.15% 0.15% 0.15% 0.15% 0.40% 0.39% 0.38% 0.39% 0.40% 3Q14 4Q14 1Q15 2Q15 3Q15 Total Core Contractual

 
NIM Compression In Line with Forecast 10 10/21/2015 Net Interest Margin (NIM) NIM Roll-forward See reconciliation of non-GAAP measures in appendix. 4.14% 4.05% 3.96% 3.94% 3.82% 3.46% 3.38% 3.26% 3.25% 3.19% 3Q14 4Q14 1Q15 2Q15 3Q15 GAAP NIM Contractual NIM 3.94% 3.82% 2Q 15 2Q 15 N on -r ec ur rin g Lo an s F un di ng s 3Q 15 -0.06% -0.05% -0.01%

 
Fee Income Flat Sequentially 11 10/21/2015 Non-interest Income Before FDIC Expense $ mm’s See reconciliation of non-GAAP measures in appendix. Non-interest Income Detail $ mm’s 10.0 10.6 9.9 10.4 11.4 3.9 3.4 2.4 2.5 1.4 13.9 14.0 12.3 12.9 12.8 3Q14 4Q14 1Q15 2Q15 3Q15 FDIC indemnification asset expense Total Non-interest Income 3Q14 2Q15 3Q15 Services charges on deposits 5.6 5.2 5.5 Debit card income 3.0 3.2 3.1 Fees on mortgage loans sold 1.2 1.3 1.0 Investment advisory and trust fees 1.2 1.1 0.9 Other 2.9 2.1 2.4 Non-interest Income ex FDIC expense 13.9 12.9 12.8 FDIC indemnification asset expense (3.9) (2.5) (1.4) Non-interest Income 10.0 10.4 11.4

 
Noninterest Expense Down 6% Y/Y 12 10/21/2015 Non-interest Expense $ mm’s * 2Q15 and 3Q15 excludes commercial FDIC indemnification asset expense. See reconciliation of non-GAAP measures in appendix. Core Efficiency Ratio* 47.5 48.6 47.9 46.5 45.6 51.4 50.9 52.6 49.5 48.3 3Q14 4Q14 1Q15 2Q15 3Q15 Non-core adjustments REO expense Core non-interest expense, before REO 64.7% 50% 55% 60% 65% 70% 75% 80% Target 60%

 
Liquidity and Capital Ratios Remain Strong 13 10/21/2015 ■ The company repurchased $2.0 mm shares of stock during 3Q at a weighted average price of $29.94 ■ Modified duration of investments was 4.7 years at September 30, 2015, vs. 4.4 years at June 30, 2015 Tier 1 Leverage Ratio (1) 3Q15 capital ratio is preliminary. Liquidity 14.4% 14.3% 14.4% 14.7% 13.6% 3Q14 4Q14 1Q15 2Q15 3Q15 1 Cash / Equivalents 11% Agency MBS 48% Agency CMBS 23% Agency CMO 8% Corporate Bonds 5% Trust Preferred 2% SBA / Other 2% Muni 1%

 
New Loan Portfolio Performing Strongly 14 10/21/2015 New Loan Portfolio Credit Metrics Past Dues & Nonaccruals 0.14% 0.11% 0.11% 0.14% 0.11% 0.22% 0.16% 0.22% 0.19% 0.17% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 3Q14 4Q14 1Q15 2Q15 3Q15 Past Due Non-Accruals 3Q14 2Q15 3Q15 Criticized 0.23% 0.65% 0.61% Classified Performing 0.53% 0.37% 0.28% Classified Nonperforming 0.22% 0.19% 0.17% Total Criticized/Classified 0.98% 1.21% 1.06% NCOs, Annualized 0.18% 0. 6% 0.15%

 
Retail Trade 15% Manufacturing 11% Real Estate 10% Health Care and Social Assistance 8% Wholesale Trade 7% Finance and Insurance 7% Services 7% Transportation 5% Hospitality / Food Services 4% Mining 4% Construction 3% Professional 3% Information 3% Education 3% Entertainment 2% Other 6% Commercial 50% CRE 17% 1-4 Resi 17% Home Equity 4% Consumer /Other 12% Sustainable Revenue Based on Customer Selection 15 New Commercial Loans by Industry New Loan Portfolio by Type 10/21/2015 Strictly Private and Confidential

 
Special Assets Down 69% Since 2012 16 10/21/2015 Special Assets Nonperforming Loans / Total Loans $ mm’s Legacy Credit Expenses $ mm’s 7.7% 5.8% 2.6% 1.8% 1.5% 2012 2013 2014 2Q15 3Q153Q14 2Q15 3Q15 Provision (reversal) on legacy loans (4.2) (0.5) 0.5 FDIC indemnification asset expense 3.9 2.5 1.4 OREO valuation expense 2.8 1.7 2.1 (Gains) losses on sales of OREO (0.2) (1.0) (0.4) Foreclosed asset related expense 0.8 0.6 0.9 Loan workout expense 0.9 0.8 0.2 Salaries and employee benefits 1.1 0.8 0.8 Total legacy credit expense 5.1 4.9 5.5 832 577 349 291 253 154 129 78 64 55 986 706 427 354 308 2012 2013 0 4 2Q15 3Q15 Loans REO -69%

 
17 Capital Bank Investment Highlights ■ Experienced management team with institutional track record ■ Positioned in Southeastern growth markets ■ Disciplined and sustainable growth story ■ Focused on deploying capital and improving profitability ■ Attractive valuation 10/21/2015

 
Appendix 18 10/21/2015

 
Reconciliation of Core Noninterest Income / Expense 19 10/21/2015 $ 000's 3Q15 2Q15 1Q15 4Q14 3Q14 Net interest income $61,637 $60,685 $59,729 $61,351 $61,425 Reported non-interest income 11,418 10,363 9,920 10,594 9,957 Less: Securities gains (losses), net (43) (57) 90 513 317 Core non-interest income $11,461 $10,420 $9,830 $10,081 $9,640 Reported non-interest expense $48,346 $49,502 $52,647 $50,932 $51,418 Less: Stock-based compensation expense – – 95 239 242 Contingent value right expense – 4 116 334 278 Debt Extinguishment – 1,438 – – – Restructuring charges 23 178 2,341 – – Severance expense 63 14 111 – – Core non-interest expense $48,260 $47,868 $49,984 $50,359 $50,898 Core Fee Ratio* 15.7% 14.7% 14.1% 14.1% 13.6% Efficiency Ratio** 66.2% 69.7% 75.6% 70.8% 72.0% Core Efficiency Ratio*** 66.0% 67.3% 71.9% 70.5% 71.6% 64.7% 65.3% * 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) Core Efficie cy Ratio*** (excluding FDIC indemnification asset expense)

 
Reconciliation of Core Net Income 20 10/21/2015 $ 000's Quarter Quarter Quarter Quarter Quarter Quarter Ended Ended Ended Ended Ended Ended 3Q15 3Q15 2Q15 2Q15 3Q14 3Q14 $15,321 $15,321 $12,990 $12,990 $13,243 $13,243 Pre-Tax After-tax Pre-Tax After-tax Pre-Tax After-tax Non-Interest Income Security losses / (gains)* 43 26 57 35 (317) (194) Non-Interest Expense - - - - 242 148 - - - 4 2 278 278 63 39 14 9 - - 23 14 178 110 - - - - 1,438 887 - - Tax effect of adjustments* (50) NA (648) NA 29 NA 15,400 15,400 14,033 14,033 $13,475 $13,475 Average Assets $7,087,882 $6,885,513 $6,637,179 Tangible Common Equity $872,075 $907,829 $910,552 ** ROA 0.86% 0.75% 0.80% *** Core ROA 0.87% 0.82% 0.81% **** Core ROTCE 7.1% 6.2% 5.9% 0.92% 0.90% * 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 ROA (excluding FDIC indemnification asset expense) Core Net Income Stock-based compensation expense* Contingent Value Right expense Restructuring charges* Severance expense * Net income Adjustments Losses on extinguishment of debt*

 
Tangible Book Value 21 10/21/2015 (In thousands, except per share data) September 30, 2015 Total common shareholders' equity $1,022,642 Intangibles, net of taxes 144,447 Tangible book value* $878,195 Common shares outstanding 44,466 Tangible book value per share $19.75 * Tangible book value is equal to book value less goodwill and core deposit intangibles, net of related deferred tax liabilities.

 
Contractual Net Interest Margin 22 10/21/2015 (1) Excludes purchase accounting adjustments $ 000s Average Earning Assets Net Interest Income Net Interest Margin September 30, 2015 Reported 6,442,167 69,167 3.82% Purchase accounting impact (55,281) 10,381 0.63% Contractual Net Interest Margin (1) 3.19% June 30, 2015 Reported 6,221,394 67,696 3.94% Purchase accounting impact (63,174) 10,711 0.69% Contractual Net Interest Margin (1) 3.25% March 31, 2015 Reported 6,168,668 66,572 3.96% Purchase accounting impact (73,831) 10,790 0.70% Contractual Net Interest Margin (1) 3.26% December 31, 2014 Reported 6,045,748 61,723 4.05% Purchase accounting impact (79,632) 10,295 0.67% Contractual Net Interest Margin (1) 3.38% September 30, 2014 Reported 5,911,601 61,660 4.14% Purchase accounting impact (91,982) 10,292 0.68% Contractual Net Interest Margin (1) 3.46% (1) Excludes purchase accounting adjustments

 

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings