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"Despite the current recessionary environment, Capital Bank realized significant net interest margin improvement and a return to profitability during the second quarter," stated B. Grant Yarber, president and CEO. "Capital Bank management continues to focus on asset quality and margin management. Through highly disciplined margin controls and a more rational competitive pricing landscape for customer deposits, our taxable equivalent net interest margin increased 45 basis points from the prior quarter in 2009. While we continue to face a difficult economy, we are encouraged by the positive trends in our net interest margin. We remain cautiously optimistic that an improved net interest margin will have a positive impact on future earnings."
Net interest income increased by $1.2 million for the quarter ended June 30, 2009 from the same quarter one year ago. This improvement was due to an increase in net interest margin by 3 basis points, from 3.14% for the second quarter of 2008 to 3.17% for the second quarter of 2009, coupled with an 11% growth in average earning assets over the same periods. Net interest margin benefited from a significant decline in the cost of interest-bearing liabilities. Rates on total interest-bearing customer deposits fell 75 basis points, from 3.11% for the second quarter of 2008 to 2.36% for the second quarter of 2009. Additionally, rates on borrowed funds dropped 38 basis points, from 4.01% to 3.63% over the same period. Partially offsetting declining funding costs was a drop in loan yields largely due to steps taken by the Federal Reserve to revive an ailing national economy last year. One result of the many policy actions taken by the Federal Reserve was a cut in the prime rate by 400 basis points during 2008, which negatively impacted yields on Capital Bank's prime-based loan portfolio. This rapid decline in rates decreased loan yields from 6.23% for the second quarter of 2008 to 5.43% for the second quarter of 2009.
Provision for loan losses for the quarter ended June 30, 2009 totaled $1.7 million, an increase of $842 thousand from the same period one year ago. The increase in the provision was partially due to loan growth of $115.2 million, or 10%, from June 30, 2008, but the increase was also driven by continued deteriorating economic conditions and weakness in the local real estate markets which resulted in downgrades to the credit ratings of certain loans in the portfolio. Management continues to thoroughly review its loan portfolio and the adequacy of its allowance for loan losses.
Past due loans as a percent of total loans increased to 1.17% at June 30, 2009 from 1.09% at December 31, 2008 and 0.78% at June 30, 2008. However, this past due ratio decreased during the second quarter of 2009, falling from 1.34% at March 31, 2009 to 1.17% at June 30, 2009. Nonperforming assets, which include loans on nonaccrual and other real estate owned, increased to 1.40% as a percent of total assets at June 30, 2009 compared to 0.63% at December 31, 2008 and 0.37% at June 30, 2008. As a result of the weakening credit quality experienced, the Company increased the allowance for loan losses to 1.44% of total loans at June 30, 2009 compared to 1.18% at both December 31, 2008 and June 30, 2008. The allowance for loan losses was 100% of nonperforming loans at June 30, 2009, a decline from 162% at December 31, 2008 and 267% at June 30, 2008.
"Weakness in the residential and commercial real estate markets from the global recession and credit crisis continues to severely impact the financial health and stability of many businesses within the communities we serve. While we believe our markets remain some of the most resilient in the country, the Company again took steps to increase the provision for loan losses compared to the same quarter one year ago," commented Mr. Yarber. "Despite the difficult economic conditions, our practice of working proactively with borrowers and dealing with problem loans has enabled Capital Bank to maintain credit quality that is superior to peer banks and other banks across the country. In fact, our nonperforming assets to total assets ratio of 1.40% at June 30, 2009 is significantly better than reported regional and national averages. While higher loan loss provisions have negatively impacted our earnings in recent quarters, we continue to believe our asset quality will position us well to take advantage of a future market recovery."
Loans grew by $39.0 million during the first half of 2009 while deposits increased by $65.5 million. Much of the loan growth occurred in the Triangle region of North Carolina, which we believe continues to present quality growth opportunities in certain sectors. On the deposit side, checking and savings accounts increased $41.2 million during the six months ended June 30, 2009 as Capital Bank continued to emphasize growth in these critical product areas. Time deposits also increased $30.9 million over the same period while money market accounts declined by $6.5 million.
"Despite significant economic uncertainty, we have continued lending to qualified borrowers within the communities we serve as evidenced by our loan growth in the first half of 2009," stated Mr. Yarber. "We are committed to doing our part to ensure that capital remains available to qualified borrowers in our markets while maintaining prudent lending standards that we believe to be in the best interests of the Company and its shareholders."
Noninterest income increased $722 thousand, or 24%, in the second quarter of 2009 compared to the same period one year ago. Included in this increase was a nonrecurring gain recorded during the quarter of $913 thousand from the collection of bank-owned life insurance policy proceeds. Additionally, the Company recorded a $336 thousand net gain from the sale of certain debt securities in the second quarter of 2009 compared to a $69 thousand net gain on the sale of debt securities in the same quarter one year ago. Partially offsetting these gains was a $307 thousand decrease in service charge income and a $189 thousand decrease in other loan fees. Service charge income, which includes overdraft and non-sufficient funds charges, dropped primarily from a decline in consumer spending during the current economic recession.
Noninterest expense increased $2.5 million, from $10.0 million during the second quarter of 2008 to $12.5 million during the second quarter of 2009. This increase included higher FDIC deposit insurance expense of $998 thousand over the quarters under comparison, of which $750 thousand was related to accrual of the FDIC's mandatory special assessment imposed on all insured financial institutions for the purpose of re-funding its reserves. The majority of the remaining $248 thousand increase in deposit insurance expense was due to increases in rates as the FDIC continued to increase insurance premiums to cover higher monitoring costs and claims. Further, salaries and employee benefits as well as occupancy costs increased a combined $978 thousand primarily due to additional costs incurred as new branches were opened during the past year in Asheville and Clayton in addition to the four branches purchased in the Fayetteville market in December 2008. Also partially contributing to this increase were nonrecurring costs incurred for the planned closing of two branches as part of a consolidation strategy in the Triad market as the Company continues to improve the efficiency of its branch network. The planned branch consolidation added $68 thousand and $127 thousand to employee benefits and occupancy expense, respectively, during the quarter ended June 30, 2009. Directors fees increased $288 thousand largely from an accelerated payout of deferred compensation benefits related to a former director.
Capital Bank Corporation, headquartered in Raleigh, N.C., with approximately $1.7 billion in total assets, offers a broad range of financial services. Capital Bank operates 32 banking offices in Asheville (4), Burlington (4), Cary, Clayton, Fayetteville (3), Graham (2), Hickory, Mebane, Morrisville, Oxford, Parkton, Pittsboro, Raleigh (5), Sanford (3), Siler City, Wake Forest and Zebulon. The Company's website is http://www.capitalbank-nc.com.
Information in this press release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates, and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Capital Bank Corporation's filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Capital Bank Corporation does not undertake a duty to update any forward-looking statements in this press release.
Capital Bank Corporation
Summary of Operations
(Unaudited) Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
(In thousands except per
share data)
Interest income $20,755 $21,283 $40,420 $44,001
Interest expense 8,591 10,355 18,075 22,164
----- ------ ------ ------
Net interest income 12,164 10,928 22,345 21,837
Provision for loan losses 1,692 850 7,678 1,415
----- --- ----- -----
Net interest income after
provision for loan losses 10,472 10,078 14,667 20,422
Noninterest income 3,724 3,002 5,830 5,242
Noninterest expense 12,465 9,996 24,029 19,614
------ ----- ------ ------
Income (loss) before taxes 1,731 3,084 (3,532) 6,050
Income tax expense (benefit) 382 869 (418) 1,668
--- --- ---- -----
Net income (loss) $1,349 $2,215 $(3,114) $4,382
====== ====== ======= ======
Earnings (loss) per common
share - basic $0.07 $0.20 $(0.38) $0.39
===== ===== ====== =====
Earnings (loss) per common
share - fully diluted $0.07 $0.20 $(0.38) $0.39
===== ===== ====== =====
Weighted average shares
outstanding:
Basic 11,448 11,310 11,430 11,300
Fully diluted 11,448 11,324 11,430 11,315
End of Period Balances
(Unaudited) 2009 2008
---- ----
June 30 March 31 December 31 September 30 June 30
(a)
------- -------- ----------- ------------ -------
(Dollars in
thousands
except per
share data)
Total assets $1,695,342 $1,665,611 $1,654,232 $1,594,402 $1,592,034
Investment
securities 268,224 286,310 278,138 244,310 246,468
Loans (gross) 1,293,340 1,277,064 1,254,368 1,194,149 1,178,157
Allowance for loan
Losses 18,602 18,480 14,795 14,017 13,910
Total earning
Assets 1,615,164 1,580,140 1,559,256 1,444,727 1,435,020
Deposits 1,380,842 1,340,974 1,315,314 1,197,721 1,182,615
Shareholders'
equity 143,306 142,674 148,514 166,521 165,731
Book value per
common share $9.03 $8.97 $9.54 $14.83 $14.76
Tangible book value
per common share $8.74 $8.66 $9.20 $9.26 $9.16
(a) Derived from audited consolidated financial statements
Average Quarterly Balances
(Unaudited) 2009 2008
---- ----
June 30 March 31 December 31 September 30 June 30
------- -------- ----------- ------------ -------
(Dollars in
thousands)
Total assets $1,665,387 $1,659,767 $1,620,817 $1,574,810 $1,578,357
Investments 279,607 289,368 246,658 245,408 256,406
Loans (gross) 1,285,571 1,265,438 1,213,027 1,176,491 1,166,795
Total earning
assets 1,588,502 1,574,017 1,473,422 1,425,516 1,433,099
Deposits 1,324,507 1,307,827 1,238,343 1,164,362 1,148,671
Shareholders'
equity 145,216 149,285 171,227 166,570 170,945
capital bank corporation
Quarterly Results
(Unaudited) 2009 2008
---- ----
June 30 March 31 December 31 September 30 June 30
------- -------- ----------- ------------ -------
(In thousands
except per
share data)
Net interest income $12,164 $10,181 $9,932 $10,827 $10,928
Provision for loan
losses 1,692 5,986 1,701 760 850
----- ----- ----- --- ---
Net interest income
After provision
for loan losses 10,472 4,195 8,231 10,067 10,078
Noninterest income 3,724 2,106 2,297 3,513 3,002
Noninterest expense 12,465 11,564 76,286 10,763 9,996
------ ------ ------ ------ -----
Income (loss) before
taxes 1,731 (5,263) (65,758) 2,817 3,084
Income tax expense
(benefit) 382 (800) (3,680) 805 869
--- ---- ------ --- ---
Net income (loss) $1,349 $(4,463) $(62,078) $2,012 $2,215
====== ======= ======== ====== ======
Earnings (loss) per
Common share -
basic $0.07 $(0.45) $(5.50) $0.18 $0.20
===== ====== ====== ===== =====
Earnings (loss) per
Common share -
fully diluted $0.07 $(0.45) $(5.50) $0.18 $0.20
===== ====== ====== ===== =====
Weighted average
Shares outstanding:
Basic 11,448 11,293 11,309 11,302 11,310
Fully diluted 11,448 11,293 11,309 11,313 11,324
Quarterly Net Interest Margin*
(Unaudited) 2009 2008
---- ----
June 30 March 31 December 31 September 30 June 30
------- -------- ----------- ------------ -------
Yield on earning
assets 5.34% 5.17% 5.51% 5.94% 6.07%
Cost of
interest-bearing
liabilities 2.50 2.80 3.05 3.12 3.24
Net interest
spread 2.84 2.37 2.46 2.82 2.83
Net interest
margin 3.17 2.72 2.78 3.13 3.14
*Annualized and on a fully taxable equivalent basis
Nonperforming Assets
(Unaudited) 2009 2008
---- ----
June 30 March 31 December 31 September 30 June 30
(a)
------- -------- ----------- ------------ -------
(Dollars in
thousands)
Commercial $6,635 $6,231 $4,682 $4,343 $3,650
Construction 11,336 10,259 3,843 1,570 418
Consumer 32 33 92 25 42
Home equity 140 96 275 275 515
Residential mortgage 387 389 223 198 582
--- --- --- --- ---
Total nonperforming
loans 18,530 17,008 9,115 6,411 5,207
Other real estate
owned 5,170 3,616 1,347 1,019 663
----- ----- ----- ----- ---
Total nonperforming
assets $23,700 $20,624 $10,462 $7,430 $5,870
======= ======= ======= ====== ======
Nonperforming assets include loans that are 90 days or more past due or
in nonaccrual status and other real estate owned.
(a) Derived from audited consolidated financial statements
capital bank corporation
Key Ratios
(Unaudited)
2009 2008
---- ----
June 30 March 31 December 31 September 30 June 30
------- -------- ----------- ------------ -------
(Dollars in
thousands)
Past due loans $15,196 $17,064 $13,642 $8,933 $9,239
Past due loans
as a percent
of total loans 1.17% 1.34% 1.09% 0.75% 0.78%
Net charge-offs $1,570 $2,301 $1,768 $653 $503
Net charge-offs
as a percent
of average loans
(annualized) 0.49% 0.73% 0.58% 0.22% 0.17%
Allowance for loan
losses as a percent
of total loans 1.44% 1.45% 1.18% 1.17% 1.18%
Nonperforming
assets as a
percent
of total assets 1.40% 1.24% 0.63% 0.47% 0.37%
Allowance for loan
losses as a percent
of nonperforming
loans 100% 109% 162% 219% 267%
CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2009 and December 31, 2008
June 30, 2009 December 31, 2008
------------- -----------------
(Dollars in thousands except share (Unaudited)
data)
Assets
Cash and due from banks:
Interest-earning $53,590 $26,621
Noninterest-earning 19,094 27,705
Federal funds sold and short term
investments 10 129
-- ---
Total cash and cash equivalents 72,694 54,455
Investment securities - available for
sale, at fair value 263,845 272,944
Investment securities - held to
maturity, at amortized cost 4,379 5,194
Loans - net of unearned income and
deferred fees 1,293,340 1,254,368
Allowance for loan losses (18,602) (14,795)
------- -------
Net loans 1,274,738 1,239,573
Premises and equipment, net 24,170 24,640
Bank-owned life insurance 22,398 22,368
Deposit premium, net 3,282 3,857
Deferred income tax 9,116 9,342
Accrued interest receivable 6,191 6,225
Other assets 14,529 15,634
------ ------
Total assets $1,695,342 $1,654,232
========== ==========
Liabilities
Deposits:
Demand, noninterest-bearing $130,567 $125,281
Savings and interest-bearing checking 209,622 173,711
Money market deposit accounts 206,259 212,780
Time deposits less than $100,000 503,476 509,231
Time deposits $100,000 and greater 330,918 294,311
------- -------
Total deposits 1,380,842 1,315,314
Repurchase agreements and federal funds
purchased 10,589 15,010
Borrowings 117,000 132,000
Subordinated debentures 30,930 30,930
Other liabilities 12,675 12,464
------ ------
Total liabilities 1,552,036 1,505,718
Commitments and contingencies
Shareholders' Equity
Preferred stock, $1,000 par value;
100,000 shares authorized; 41,279
shares issued and outstanding
(liquidation preference of $41,279) 39,982 39,839
Common stock, no par value; 20,000,000
shares authorized; 11,300,369 and
11,238,085 shares issued and
outstanding 139,641 139,209
Retained deficit (37,515) (31,420)
Accumulated other comprehensive income 1,198 886
----- ---
Total shareholders' equity 143,306 148,514
------- -------
Total liabilities and shareholders'
equity $1,695,342 $1,654,232
========== ==========
CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2009 and 2008 (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
(Dollars in thousands
Except per share data)
Interest income:
Loans and loan fees $17,412 $18,111 $33,504 $37,610
Investment securities:
Taxable interest income 2,561 2,216 5,360 4,434
Tax-exempt interest
income 763 805 1,527 1,634
Dividends 13 118 13 235
Federal funds and other
interest income 6 33 16 88
- -- -- --
Total interest income 20,755 21,283 40,420 44,001
------ ------ ------ ------
Interest expense:
Deposits 7,033 8,026 14,799 17,098
Borrowings and repurchase
agreements 1,558 2,329 3,276 5,066
----- ----- ----- -----
Total interest expense 8,591 10,355 18,075 22,164
----- ------ ------ ------
Net interest income 12,164 10,928 22,345 21,837
Provision for loan losses 1,692 850 7,678 1,415
----- --- ----- -----
Net interest income
after provision
for loan losses 10,472 10,078 14,667 20,422
------ ------ ------ ------
Noninterest income:
Service charges and other
fees 959 1,266 1,911 2,225
Mortgage fees and revenues 385 354 618 626
Other loan fees 198 387 492 500
Brokerage fees 150 245 313 401
Bank card services 385 354 724 653
Bank-owned life insurance 1,165 260 1,423 562
Net gain on investment
securities 336 69 16 140
Other 146 67 333 135
--- -- --- ---
Total noninterest income 3,724 3,002 5,830 5,242
----- ----- ----- -----
Noninterest expense:
Salaries and employee
benefits 5,856 5,269 11,817 10,172
Occupancy 1,348 957 2,721 1,954
Furniture and equipment 739 793 1,569 1,540
Data processing and
telecommunications 573 528 1,204 960
Advertising 223 205 546 520
Office expenses 322 315 657 680
Professional fees 434 281 813 651
Business development and
travel 247 340 575 673
Amortization of deposit
premiums 287 257 575 514
Miscellaneous loan handling
costs 372 224 535 318
Directors fees 477 189 836 589
Insurance 140 103 244 198
FDIC deposit insurance 1,179 181 1,408 228
Other 268 354 529 617
--- --- --- ---
Total noninterest
expense 12,465 9,996 24,029 19,614
------ ----- ------ ------
Net income before tax
expense 1,731 3,084 (3,532) 6,050
Income tax expense (benefit) 382 869 (418) 1,668
--- --- ---- -----
Net income (loss) $1,349 $2,215 $(3,114) $4,382
====== ====== ======= ======
Dividends and accretion
on preferred stock 587 - 1,174 -
Net income (loss)
attributable to common
shareholders $762 $2,215 $(4,288) $4,382
==== ====== ======= ======
Earnings (loss) per common
share - basic $0.07 $0.20 $(0.38) $0.39
===== ===== ====== =====
Earnings (loss) per common
share - diluted $0.07 $0.20 $(0.38) $0.39
===== ===== ====== =====
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
For the Three Months Ended June 30, 2009, March 31, 2009 and June 30, 2008
Tax Equivalent Basis (1)
June 30, 2009
-------------
(Dollars in thousands) Average Amount Average
Balance Earned Rate
----------------- ------ -------
Assets
Loans receivable: (2)
Commercial $1,115,003 $15,244 5.48%
Consumer 54,552 902 6.63
Home equity 94,054 974 4.15
Residential mortgages 21,962 292 5.32
------ --- ---
Total loans 1,285,571 17,412 5.43
Investment securities (3) 278,033 3,731 5.37
Federal funds sold and
interest-earning cash (4) 24,898 6 0.10
------ - ---
Total interest-earning
assets 1,588,502 $21,149 5.34%
======= ====
Cash and due from banks 15,294
Other assets 80,296
Allowance for loan losses (18,705)
-------
Total assets $1,665,387
==========
Liabilities and Equity
Savings deposits $29,609 $13 0.18%
Interest-bearing
demand deposits 368,132 1,152 1.26
Time deposits 796,306 5,868 2.96
------- ----- ---
Total interest-bearing
deposits 1,194,047 7,033 2.36
Borrowed funds 140,682 1,273 3.63
Subordinated debt 30,930 278 3.61
Repurchase agreements and
fed funds purchased 12,010 7 0.23
------ - ---
Total interest-bearing
liabilities 1,377,669 $8,591 2.50%
====== ====
Noninterest-bearing
deposits 130,460
Other liabilities 12,042
------
Total liabilities 1,520,171
Shareholders' equity 145,216
-------
Total liabilities and
shareholders' equity $1,665,387
==========
Net interest spread (5) 2.84%
Tax equivalent adjustment $394
Net interest income and net
interest margin (6) $12,558 3.17%
======= ====
March 31, 2009
--------------
Average Amount Average
(Dollars in thousands) Balance Earned Rate
----------------- ------ ------
Assets
Loans receivable: (2)
Commercial $1,095,804 $13,942 5.16%
Consumer 52,873 910 6.98
Home equity 93,861 966 4.17
Residential mortgages 22,900 274 4.79
------ --- ---
Total loans 1,265,438 16,092 5.16
Investment securities (3) 288,679 3,957 5.48
Federal funds sold and
interest-earning cash (4) 19,900 10 0.20
------ -- ---
Total
interest-earning assets 1,574,017 $20,059 5.17%
======= ====
Cash and due from banks 22,116
Other assets 78,814
Allowance for loan losses (15,180)
-------
Total assets $1,659,767
==========
Liabilities and Equity
Savings deposits $28,793 $13 0.18%
Interest-bearing
demand deposits 353,262 1,202 1.38
Time deposits 800,879 6,551 3.32
------- ----- ----
Total interest-bearing
deposits 1,182,934 7,766 2.66
Borrowed funds 146,233 1,389 3.85
Subordinated debt 30,930 322 4.22
Repurchase agreements and
fed funds purchased 13,849 7 0.20
------ ---- ----
Total
interest-bearing
liabilities 1,373,946 $9,484 2.80%
====== ====
Noninterest-bearing
deposits 124,893
Other liabilities 11,643
------
Total liabilities 1,510,482
Shareholders' equity 149,285
-------
Total liabilities and
shareholders' equity $1,659,767
==========
Net interest spread (5) 2.37%
Tax equivalent adjustment $394
Net interest income and
net interest margin (6) $10,575 2.72%
======= ====
June 30, 2008
-------------
(Dollars in thousands) Average Amount Average
Balance Earned Rate
----------------- ------ -------
Assets
Loans receivable: (2)
Commercial $1,010,899 $15,713 6.23%
Consumer 46,344 869 7.52
Home equity 80,842 1,101 5.46
Residential mortgages 28,710 427 5.95
------ --- ---
Total loans 1,166,795 18,111 6.23
Investment securities (3) 256,406 3,555 5.55
Federal funds sold and
interest-earning cash (4) 9,898 33 1.34
----- -- ---
Total
interest-earning assets 1,433,099 $21,699 6.07%
======= ====
Cash and due from banks 22,938
Other assets 135,976
Allowance for loan losses (13,656)
-------
Total assets $1,578,357
==========
Liabilities and Equity
Savings deposits $30,540 $35 0.46%
Interest-bearing demand
deposits 335,851 1,635 1.95
Time deposits 668,690 6,356 3.81
------- ----- ---
Total interest-bearing
deposits 1,035,081 8,026 3.11
Borrowed funds 181,841 1,820 4.01
Subordinated debt 30,930 403 5.23
Repurchase agreements and
fed funds purchased 35,183 106 1.21
------ --- ---
Total interest-bearing
liabilities 1,283,035 $10,355 3.24%
======= ====
Noninterest-bearing
deposits 113,590
Other liabilities 10,787
------
Total liabilities 1,407,412
Shareholders' equity 170,945
-------
Total liabilities and
shareholders' equity $1,578,357
==========
Net interest spread (5) 2.83%
Tax equivalent adjustment $416
Net interest income and net
interest margin (6) $11,344 3.14%
======= ====
(1) The tax equivalent basis is computed using a tax rate of 34%.
(2) Loans receivable include nonaccrual loans for which accrual of
interest has not been recorded.
(3) The average balance for investment securities excludes the effect of
their mark-to-market adjustment, if any.
(4) The Federal Reserve began paying interest on cash balances in the
quarter ended December 31, 2008. For comparison purposes, average
balances have been adjusted for all periods presented to include cash
held at the Federal Reserve as interest earning.
(5) Net interest spread represents the difference between the average
yield on interest-earning assets and the average cost of interest-
bearing liabilities.
(6) Net interest margin represents net interest income divided by average
interest-earning assets.
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
For the Six Months Ended June 30, 2009 and 2008
Tax Equivalent Basis (1)
June 30, 2009
-------------
(Dollars in thousands) Average Amount Average
Balance Earned Rate
-------------------- ------- --------
Assets
Loans receivable: (2)
Commercial $1,105,457 $29,185 5.32%
Consumer 53,717 1,812 6.80
Home equity 93,958 1,941 4.17
Residential mortgages 22,428 566 5.05
------ --- ----
Total loans 1,275,560 33,504 5.30
Investment securities (3) 283,327 7,688 5.43
Federal funds sold and
interest-earning cash (4) 22,413 16 0.14
------ -- ----
Total interest-earnings
assets 1,581,300 $41,208 5.26%
======= ====
Cash and due from banks 18,686
Other assets 79,559
Allowance for loan losses (16,952)
-------
Total assets $1,662,593
==========
Liabilities and Equity
Savings deposits $29,204 $26 0.18%
Interest-bearing demand
deposits 360,738 2,355 1.32
Time deposits 798,580 12,418 3.14
------- ------ ----
Total interest-bearing
deposits 1,188,522 14,799 2.51
Borrowed funds 143,442 2,663 3.74
Subordinated debt 30,930 599 3.91
Repurchase agreements and
fed funds purchased 12,924 14 0.22
------ -- ----
Total interest-bearing
liabilities 1,375,818 $18,075 2.65%
======= ====
Noninterest-bearing deposits 127,692
Other liabilities 11,844
------
Total liabilities 1,515,354
Shareholders' equity 147,239
-------
Total liabilities and
shareholders' equity $1,662,593
==========
Net interest spread (5) 2.61%
Tax equivalent adjustment $788
Net interest income and
net interest margin (6) $23,133 2.95%
======= ====
June 30, 2008
-------------
(Dollars in thousands) Average Amount Average
Balance Earned Rate
-------------------- ------- --------
Assets
Loans receivable: (2)
Commercial $998,552 $32,490 6.53%
Consumer 46,522 1,779 7.67
Home equity 80,203 2,422 6.06
Residential mortgages 29,485 919 6.23
------ --- ----
Total loans 1,154,762 37,610 6.53
Investment securities (3) 256,472 7,144 5.57
Federal funds sold and
interest-earning cash (4) 10,721 88 1.65
------ -- ----
Total interest-earnings
assets 1,421,955 $44,842 6.32%
======= ====
Cash and due from banks 22,854
Other assets 136,024
Allowance for loan losses (13,659)
-------
Total assets $1,567,174
==========
Liabilities and Equity
Savings deposits $30,461 $81 0.53%
Interest-bearing demand
deposits 334,480 3,489 2.09
Time deposits 663,150 13,528 4.09
------- ------ ----
Total interest-bearing
deposits 1,028,091 17,098 3.34
Borrowed funds 176,743 3,843 4.36
Subordinated debt 30,930 929 6.02
Repurchase agreements and
fed funds purchased 35,373 294 1.67
------ --- ----
Total interest-bearing
liabilities 1,271,137 $22,164 3.50%
======= ====
Noninterest-bearing
deposits 115,799
Other liabilities 10,960
------
Total liabilities 1,397,896
Shareholders' equity 169,278
-------
Total liabilities and
shareholders' equity $1,567,174
==========
Net interest spread (5) 2.83%
Tax equivalent adjustment $841
Net interest income and
net interest margin (6) $22,678 3.20%
======= ====
(1) The tax equivalent basis is computed using a tax rate of 34%.
(2) Loans receivable include nonaccrual loans for which accrual of
interest has not been recorded.
(3) The average balance for investment securities excludes the effect of
their mark-to-market adjustment, if any.
(4) The Federal Reserve began paying interest on cash balances in the
quarter ended December 31, 2008. For comparison purposes, average
balances have been adjusted for all periods presented to include cash
held at the Federal Reserve as interest earning.
(5) Net interest spread represents the difference between the average
yield on interest-earning assets and the average cost of interest-
bearing liabilities.
(6) Net interest margin represents net interest income divided by average
interest-earning assets.
SOURCE Capital Bank Corporation
http://www.capitalbank-nc.com
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