TIBB Tib Financial Corp. (MM)

TIB Financial Corp. (NASDAQ: 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 first quarter of 2012. Operating and financial highlights include the following:

• The Company reported net income of $2.0 million, or $0.16 per diluted share, for the three months ended March 31, 2012 as compared to net income of $1.1 million, or $0.07 per diluted share for the three months ended March 31, 2011.
• The Company holds a 21% ownership interest in Capital Bank, NA at March 31, 2012 which has 143 branches and $6.5 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., which it expects to close, pending shareholder and regulatory approval, during the second quarter of 2012. Southern Community Bank and Trust has approximately $1.5 billion in assets and operates 22 branches throughout North Carolina.
• During the first quarter of 2012, the Company’s investment in Capital Bank, NA increased by $2.0 million as equity in income from Capital Bank NA of $2.5 million was partially offset by the Company’s share of declines in other comprehensive income of $0.5 million.

“I am very excited about CBF’s agreement to acquire 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. Integration planning is already underway, and as I have gotten to know more of Southern Community’s workforce, I have been impressed by their professionalism and their commitment to their customers and their communities,” stated Gene Taylor, Chairman and Chief Executive Officer of CBF and TIB Financial Corp.

“Organic loan production, deleveraging and core deposit growth is helping improve the Bank’s profitability, and now that the integration of Tennessee is complete, we are in position to rationalize certain duplicative functions with the goal of continuing to improve our efficiency ratio,” commented Chris Marshall, Chief Financial Officer of CBF and TIB Financial Corp.

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. 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.

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, N.A., 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%.

The Company’s investment in Capital Bank, NA is recorded as an equity-method investment in that entity. As of March 31, 2012, the Company’s investment in Capital Bank, NA totaled $202.9 million, which reflected the Company’s pro rata ownership of Capital Bank, NA’s total shareholders’ equity at that date. 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.

As of March 31, 2012, following the mergers, Capital Bank, NA had total assets of $6.5 billion, total deposits of $5.3 billion and shareholders’ equity of $949.3 million and operated 143 branches in Florida, North Carolina, South Carolina, Tennessee and Virginia.

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

    Three months ended March 31, 2012 Interest income $74,132 Interest expense

8,725

Net interest income 65,407 Provision for loan losses 5,376 Non-interest income 14,614 Non-interest expense 55,217 Net income $11,907

Financial Discussion

The Company reported net income of $2.0 million for the first quarter compared to a net loss of $819,000 for the fourth quarter of 2011 and net income of $1.1 million for the first 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 first quarter of 2012 includes three months of equity in income from its investment in Capital Bank, NA which amounted to $2.5 million, net of tax and therefore are generally not comparable to the operations during the first 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 2011, the Company’s registered investment advisor, Naples Capital Advisors, Inc.’s 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 March 31, 2012 was approximately $185,000.

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 $6.5 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 INCOME

(Dollars in thousands, except per share data)

            For the Quarter Ended December September June 30,  

March 31,

March 31, 2012   31, 2011   30, 2011   2011  

2011

Interest and dividend income $2 $2 $10 $5,290 $15,844 Interest expense 462   492   471   1,356   3,162 NET INTEREST INCOME (EXPENSE) (460 ) (490 ) (461 ) 3,934   12,682   Provision for loan losses -   -   -   136   485   NON-INTEREST INCOME: Equity in income of Capital Bank, NA 2,545 1,453 1,973 658 - Investment advisory and trust fees 131 120 407 379 387 Service charges on deposit accounts - - - 257 813 Fees on mortgage loans sold - - - 144 354 Investment securities gains, net - - - - 12 Other income -   -   -   464   1,205 Total non-interest income 2,676   1,573   2,380   1,902   2,771   NON-INTEREST EXPENSE: Salaries & employee benefits 106 18 240 2,250 6,501 Net occupancy expense 6 6 14 692 2,048 Foreclosed asset related expense - - - 43 522

Impairment of wealth management

customer relationship intangible

- 2,872 - - - Other expense 348   351   345   1,614   4,254 Total non-interest expense 460   3,247   599   4,599   13,325   Income (loss) before income taxes 1,756 (2,164 ) 1,320 1,101 1,643 Income tax (benefit) expense (249 ) (1,345 ) (271 ) 141   575 NET INCOME (LOSS) $2,005   $(819 ) $1,591   $960   $1,068                   BASIC EARNINGS (LOSS) PER COMMON SHARE: $0.16   $(0.07 ) $0.13   $0.08   $0.09                   DILUTED EARNINGS (LOSS) PER COMMON SHARE: $0.16   $(0.07 ) $0.13   $0.07   $0.07   TIB FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

 

(Dollars and shares in thousands, except per share data)     March 31,   December 31, 2012   2011 Assets Cash and due from banks $1,008 $1,159 Interest-bearing deposits with banks 874   1,062 Cash and cash equivalents 1,882 2,221   Intangible assets, net 227 235 Accrued interest receivable and other assets 1,308 1,324 Equity method investment in Capital Bank, NA 202,872   200,843 Total assets $206,289   $204,623   Liabilities and Shareholders’ Equity Liabilities Long-term borrowings $23,250 $23,176 Deferred income tax liability 3,615 3,641 Accrued interest payable and other liabilities 557   428 Total liabilities 27,422   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 170,801 170,801 Retained earnings 5,365 3,360 Accumulated other comprehensive income 1,466   1,982 Total shareholders’ equity 178,867   177,378       Total Liabilities and Shareholders’ Equity $206,289   $204,623   TIB FINANCIAL CORP. AND SUBSIDIARIES SELECTED FINANCIAL DATA

(Dollars and shares in thousands, except per share data)

      As of or For the Quarter Ended March 31,   December 31,   September 30,   June 30,   March 31, 2012   2011   2011   2011   2011 Real estate mortgage loans: Commercial $- $- $- $- $604,192 Residential - - - - 232,347 Farmland - - - - 12,538 Construction and vacant land - - - - 40,503 Commercial and agricultural loans - - - - 60,219 Indirect auto loans - - - - 40,653 Home equity loans - - - - 30,541 Other consumer loans -   -   -   -   8,471 Total loans $-   $-   $-   $-   $1,029,464   Gross loans $- $- $- $- $1,030,377   Net loan charge-offs $- $- $- $14 $10   Allowance for loan losses $- $- $- $- $877 Allowance for loan losses/ loans originated in period N/A N/A N/A N/A 1.14% Allowance for loan losses excluding specific reserves N/A N/A N/A N/A 877   Total interest-earning assets $874 $1,062 $1,186 $5,124 $1,546,918 Other real estate owned $- $- $- $- $19,504 Other repossessed assets $- $- $- $- $108 Goodwill and intangibles, net of accumulated amortization $227 $235 $3,198 $3,288 $41,042   Interest-bearing deposits: NOW accounts $- $- $- $- $180,204 Money market - - - - 214,532 Savings deposits - - - - 111,645 Time deposits - - - - 609,219 Non-interest bearing deposits -   -   -   -   224,614 Total deposits $-   $-   $-   $-   $1,340,214   Tax equivalent net interest margin NM NM NM 3.08% 3.34%

Non-interest expense/tax equivalent net interest

income and non-interest income

20.76% 34.63% 31.21% 78.68% 86.06% Average diluted common shares 12,350 12,350 12,350 13,430 14,963 End of quarter common shares outstanding 12,350 12,350 12,350 12,350 12,350 Total equity $178,867 $177,378 $178,317 $180,036 $186,981 Book value per common share $14.48 $14.36 $14.44 $14.58 $15.14 Tangible book value per common share $12.25 $12.12 $12.08 $12.33 $11.82

Tier 1 capital to average assets – Capital Bank, NA

(TIB Bank at March 31, 2011)

10.8% 10.4% 13.8% 10.5% 8.4%

Tier 1 capital to risk weighted assets - Capital Bank, NA

(TIB Bank at March 31, 2011)

16.1% 15.7% 16.0% 17.0% 13.2%

Total capital to risk weighted assets - Capital Bank, NA

(TIB Bank at March 31, 2011)

17.2% 16.7% 16.5% 17.5% 13.3%   Total assets     $206,289   $204,623   $206,526   $210,103   $1,729,342