Capital Bank Corporation owns about a quarter of Capital Bank, NA, which has more than 140 offices in the Carolinas, Florida, Tennessee, and Virginia. The bank provides consumer and commercial banking services such as savings, checking, and health savings accounts, as well as CDs, IRAs, and credit cards. Real estate loans, including commercial and residential mortgages, as well as construction, land development, and farmland loans, make up about 85% of the bank's loan portfolio. Business and consumer loans help to round out its lending activities. The bank offers private banking, trust, and investment services through affiliate Naples Capital Advisors.
Capital Bank Financial (formerly North American Financial Holdings or NAFH) owns about 83% of Capital Bank Corporation after agreeing to pay some $181 million for its stake in 2010 (the deal was finalized early the following year). Capital Bank Financial went public in 2012, and Capital Bank Corporation will eventually be merged into the company.
The former NAFH was formed in 2009 to invest in struggling and failed banks, primarily in the southern US. It has acquired several banks in its target market, including Capital Bank, GreenBank, TIB Bank, Metro Bank, Turnberry, and 1st National Bank of the South. The company merged the banks into the newly formed Capital Bank, NA, which took the place of the former Capital Bank in 2011. In addition to Capital Bank Corporation's stake, Capital Bank Financial and TIB Financial each own about 20% of Capital Bank, NA, while Green Bankshares holds more than a third.
Capital Bank Corporation's interest in Capital Bank, NA translated to losses of about $64 million in fiscal 2010 as the bank continued to stockpile provisions for loan losses. Credit quality improved, however, along with the broader economy in 2011, and the company turned a modest profit of some $5 million on revenues of nearly $40 million.
Like many financial institutions, the former Capital Bank was negatively impacted by the economic downturn that began in 2008. As its nonperforming assets mounted, the company implemented cost-saving measures such as instituting a pay freeze and reducing the size of its board of directors. The company attempted to raise capital through a 2009 stock offering through outside private equity investors. However, the stock offering, after being delayed, ended up bringing in much less money than originally hoped, and a deal involving an unnamed private equity investor lapsed and never materialized. The former NAFH stepped in the following year. – less