TIB Financial Corp. Reports Financial Results for the Second Quarter 2012

Marketwired

NAPLES, FL--(Marketwire -08/08/12)- TIB Financial Corp. (TIBB), a majority-owned subsidiary of Capital Bank Financial Corp. ("CBF"; formerly known as North American Financial Holdings, Inc.), today reported its unaudited financial results for the second quarter of 2012. Operating and financial highlights include the following:

  • The Company reported net income of $1.9 million, or $0.15 per diluted share, for the three months ended June 30, 2012 as compared to net income of $1.0 million, or $0.07 per diluted share for the three months ended June 30, 2011.

  • The Company holds a 21% ownership interest in Capital Bank, NA at June 30, 2012 which has 143 branches and $6.3 billion in assets in Florida, North Carolina, South Carolina, Tennessee and Virginia.

  • CBF, the Company's majority shareholder, agreed to acquire 100% of Southern Community Financial Corp., and the transaction is expected to close, pending shareholder and regulatory approval, during the third quarter of 2012. Southern Community Bank and Trust has approximately $1.5 billion in assets and operates 22 branches throughout North Carolina.

  • The Company increased the equity investment balance in Capital Bank, NA by $2.4 million based on its equity in Capital Bank, NA's net income and increased the equity investment balance by $1.3 million based on its equity in Capital Bank, NA's other comprehensive income in the second quarter of 2012.

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

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

Bank Merger

Effective April 29, 2011, TIB Bank (the "Bank"), a wholly-owned subsidiary of the Company, merged (the "Merger") with and into NAFH National Bank ("NAFH Bank"), a national banking association, with NAFH Bank as the surviving entity. On June 30, 2011, Capital Bank, a wholly-owned subsidiary of Capital Bank Corp., an affiliated majority-owned subsidiary of CBF, also merged with and into NAFH Bank, with NAFH Bank as the surviving entity. In connection with the merger, NAFH Bank changed its name to Capital Bank, NA. Additionally on September 7, 2011, GreenBank merged with and into Capital Bank, NA. Through the subsidiary bank mergers, the common stock of the subsidiary banks was converted into shares of Capital Bank, NA common stock based on each entity's relative tangible book value. As a result of the mergers of TIB Bank, Capital Bank and Green Bank into Capital Bank, NA, the Company now owns approximately 21% of Capital Bank, NA, with CBF directly owning 19%, Capital Bank Corp. directly owning 26% and Green Bankshares owning the remaining 34%. As of June 30, 2012, following the mergers, Capital Bank, NA had total assets of $6.3 billion, total deposits of $5.1 billion and shareholders' equity of $966.5 million and operated 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia. CBF is the owner of approximately 94% of the Company's common stock, approximately 83% of Capital Bank Corp.'s common stock, and approximately 90% of Green Bankshares common stock.

The Company's investment in Capital Bank, NA is recorded as an equity-method investment in that entity. As of June 30, 2012, the Company's investment in Capital Bank, NA totaled $206.5 million, which reflected the Company's pro rata ownership of Capital Bank, NA's total shareholders' equity at that date. In periods subsequent to the Bank Merger, the Company will adjust this equity investment balance on its equity in Capital Bank, NA's net income and comprehensive income. In connection with the Merger, the assets and liabilities of the Bank were de-consolidated from the Company's balance sheet resulting in a significant decrease in the total assets and total liabilities of the Company in the second quarter of 2011.

The following table presents summarized financial information for Capital Bank, NA:

 

Three months ended Six months ended
June 30, 2012 June 30, 2012
------------------- -------------------
Interest income $ 72,893 $ 147,025
Interest expense 8,000 16,725
------------------- -------------------
Net interest income 64,893 130,300
Provision for loan losses 6,608 11,984
Non-interest income 12,298 26,912
Non-interest expense 52,799 108,017
Net income 11,326 23,234



Financial Discussion

The Company reported net income of $1.9 million for the second quarter compared to a net income of $2.0 million for the first quarter of 2012 and net income of $1.0 million for the second quarter of 2011. Due to the Merger discussed above and the resulting deconsolidation of TIB Bank on April 29, 2011, the operating results for the second quarter of 2012 includes three months of equity in income from its investment in Capital Bank, NA which amounted to $2.4 million, net of tax and therefore are generally not comparable to the operations during the second quarter of 2011. Due to the Company accounting for its investment in Capital Bank, NA using the equity method, a comparison of net interest margin to prior periods is not meaningful and is excluded.

During the second quarter of 2012 equity income increased by $1.7 million to $2.4 million, as compared to the second quarter of 2011. This increase was a combination of the second quarter of 2011 not containing a full three months of activity due to the Merger discussed above and a general growth in earnings year over year Capital Bank, NA. The Company reported $0.9 million of investment advisory fees in the second quarter 2012, a $0.1 million decrease from the prior quarter which was a result of an overall decline in investment related fees. During the quarter the Company had $0.1 million of merger related expenses stemming from professional service expenses.

During 2011, the Company's registered investment advisor, Naples Capital Advisors, Inc., experienced a decrease in assets under advisement to approximately $102 million from approximately $193 million as of December 31, 2010, following the departure of certain employees, leading to an impairment charge of $2.9 million recorded during the fourth quarter of 2011. The remaining value of the customer relationship intangible at June 30, 2012 was approximately $180,000.

Potential Merger of TIB Financial Corp. and CBF

On September 1, 2011, CBF and the Company's Board of Directors approved and adopted a plan of merger. The plan of merger provides for the merger of TIB Financial Corp. with and into CBF, with CBF continuing as the surviving entity. In the merger, each share of TIB Financial Corp.'s common stock issued and outstanding immediately prior to the completion of the merger, except for shares for which appraisal rights are properly exercised and certain shares held by CBF or TIB Financial Corp., will be converted into the right to receive 0.7205 of a share of CBF Class A common stock. No fractional shares of Class A common stock will be issued in connection with the merger, and holders of TIB Financial Corp. common stock will be entitled to receive cash in lieu thereof.

Since CBF currently owns more than 90% of common stock of TIB Financial Corp., under Delaware and Florida law, no vote of our stockholders is required to complete the merger. CBF will determine when and if the merger will ultimately take place.

About TIB Financial Corp.

Headquartered in Naples, Florida, TIB Financial Corp. is a financial services company with a 21% equity method investment in Capital Bank NA, a national banking association with approximately $6.3 billion in total assets and 143 full-service banking offices throughout southern Florida and the Florida Keys, North Carolina, South Carolina, Tennessee and Virginia. TIB Financial Corp. is also the parent company of Naples Capital Advisors, Inc., a registered investment advisor.

To learn more about Capital Bank NA and Naples Capital Advisors, Inc., visit www.capitalbank-us.com and www.naplescapitaladvisors.com, respectively.

Copies of recent news releases, SEC filings, price quotes, stock charts and other valuable information may be found on TIB's investor relations site at www.capitalbank-us.com. For more information, contact Christopher G. Marshall, Chief Financial Officer, at (704) 554-5901.

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

SUPPLEMENTAL FINANCIAL DATA IS ATTACHED

 

TIB FINANCIAL CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)

For the Quarter Ended
June 30, March 31, December 31, September 30, June 30,
2012 2012 2011 2011 2011
-------- --------- ------------ ------------- --------
Interest and
dividend income $ 1 $ 2 $ 2 $ 10 $ 5,290
Interest expense 440 462 492 471 1,356
-------- --------- ------------ ------------- --------
NET INTEREST
INCOME (EXPENSE) (439) (460) (490) (461) 3,934
-------- --------- ------------ ------------- --------

Provision for
loan losses - - - - 136
-------- --------- ------------ ------------- --------

NON-INTEREST
INCOME:
Equity in
income of
Capital Bank,
NA 2,420 2,545 1,453 1,973 658
Investment
advisory and
trust fees 85 131 120 407 379
Service charges
on deposit
accounts - - - - 257
Fees on
mortgage loans
sold - - - - 144
Investment
securities
gains, net - - - - -
Other income - - - - 464
-------- --------- ------------ ------------- --------
Total non-
interest
income 2,505 2,676 1,573 2,380 1,902
-------- --------- ------------ ------------- --------

NON-INTEREST
EXPENSE:
Salaries &
employee
benefits 103 106 18 240 2,250
Net occupancy
expense 3 6 6 14 692
Foreclosed
asset related
expense - - - - 43
Impairment of
wealth
management
customer
relationship
intangible - - 2,872 - -
Merger related
costs 127 - - - -
Other expense 301 348 351 345 1,614
-------- --------- ------------ ------------- --------
Total non-
interest
expense 534 460 3,247 599 4,599
-------- --------- ------------ ------------- --------

Income (loss)
before income
taxes 1,532 1,756 (2,164) 1,320 1,101
Income tax
(benefit)
expense (369) (249) (1,345) (271) 141
-------- --------- ------------ ------------- --------
NET INCOME (LOSS) $ 1,901 $ 2,005 $ (819) $ 1,591 $ 960
-------- --------- ------------ ------------- --------

BASIC EARNINGS
(LOSS) PER
COMMON SHARE: $ 0.15 $ 0.16 $ (0.07) $ 0.13 $ 0.08
-------- --------- ------------ ------------- --------

DILUTED EARNINGS
(LOSS) PER
COMMON SHARE: $ 0.15 $ 0.16 $ (0.07) $ 0.13 $ 0.07
-------- --------- ------------ ------------- --------



TIB FINANCIAL CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS

(Dollars and shares in thousands, except per share June 30, December 31,
data) 2012 2011
------------ ------------
Assets
Cash and due from banks $ 621 $ 1,159
Interest-bearing deposits with banks 651 1,062
------------ ------------
Cash and cash equivalents 1,272 2,221

Intangible assets, net 219 235
Accrued interest receivable and other assets 1,619 1,324
Equity method investment in Capital Bank, NA 206,536 200,812
------------ ------------
Total assets $ 209,646 $ 204,592
============ ============

Liabilities and Shareholders' Equity
Liabilities
Long-term borrowings $ 23,324 $ 23,176
Deferred income tax liability 3,589 3,641
Accrued interest payable and other liabilities 721 428
------------ ------------
Total liabilities 27,634 27,245
------------ ------------

Shareholders' Equity
Preferred stock - $.10 par value: 5,000 shares
authorized, none issued and outstanding - -
Common stock - $.10 par value: 50,000 shares
authorized, 12,350 issued and outstanding 1,235 1,235
Additional paid in capital 170,770 170,770
Retained earnings 7,266 3,360
Accumulated other comprehensive income 2,741 1,982
------------ ------------
Total shareholders' equity 182,012 177,347
------------ ------------

------------ ------------
Total Liabilities and Shareholders' Equity $ 209,646 $ 204,592
============ ============



 
TIB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(Dollars and shares in thousands, except per share data)

As of or For the Quarter Ended
----------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
2012 2012 2011 2011 2011
-------- --------- ------------ ------------- --------


Net loan charge-
offs $ - $ - $ - $ - $ 14

Total interest-
earning assets $ 651 $ 874 $ 1,062 $ 1,186 $ 5,124
Goodwill and
intangibles,
net of
accumulated
amortization $ 219 $ 227 $ 235 $ 3,198 $ 3,288

Tax equivalent
net interest
margin NM NM NM NM 3.08%
Non-interest
expense/tax
equivalent net
interest income
and non-
interest income 25.85% 20.76% 34.63% 31.21% 78.80%
Average diluted
common shares 12,350 12,350 12,350 12,350 13,430
End of quarter
common shares
outstanding 12,350 12,350 12,350 12,350 12,350
Total equity $182,012 $ 178,836 $ 177,347 $ 178,286 $180,036
Book value per
common share $ 14.74 $ 14.48 $ 14.36 $ 14.43 $ 14.58
Tangible book
value per
common share $ 12.46 $ 12.19 $ 12.06 $ 12.07 $ 11.86
Tier 1 capital
to average
assets -
Capital Bank,
NA 11.4% 10.8% 10.4% 13.8% 10.5%
Tier 1 capital
to risk
weighted assets
- Capital Bank,
NA 16.4% 16.1% 15.8% 16.0% 17.0%
Total capital to
risk weighted
assets -
Capital Bank,
NA 17.6% 17.2% 16.7% 16.5% 17.5%

Total assets $209,646 $ 206,258 $ 204,592 $ 206,495 $210,103



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

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