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Capital Bank Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 10, 2012 05:22PM

Capital Bank Corp. (CBKN) filed Quarterly Report for the period ended 2012-06-30. Capital Bank Corporation has a market cap of $210.1 million; its shares were traded at around $2.35 with a P/E ratio of 30.6 and P/S ratio of 5.4.



Highlight of Business Operations:

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

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

The following tables (Average Balances, Interest Earned or Paid, and Interest Yields/Rates) reflect the Company’s effective yield on interest-earning assets and cost of funds. Yields and costs are computed by dividing income or expense for the period by the respective daily average asset or liability balance. Changes in net interest income cannot be explained in terms of fluctuations in volume and rate due to the different lengths of the periods presented in the following tables.

Total shareholders’ equity increased from $224.8 million as of December 31, 2011 (Successor) to $231.1 million as of June 30, 2012 (Successor). Common stock, no par value, totaled $218.8 million as of June 30, 2012 (Successor) and December 31, 2011 (Successor). The Company’s retained earnings increased by $5.4 million in the six months ended June 30, 2012 (Successor), which represents the Company’s net income in the first half of 2012. Accumulated other comprehensive income totaled $1.7 million as of June 30, 2012 (Successor) compared to $771 thousand as of December 31, 2011 (Successor), and represented the Company’s equity in Capital Bank, NA’s other comprehensive income in the period subsequent to the Bank Merger.

Read the The complete Report



Stocks Discussed: CBKN,
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