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Charlotte equity firm buys 85 percent of Capital Bank for $181M

Posted November 4, 2010

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— North American Financial Holdings, a new private equity venture formed in 2009 by former executives at Bank of America, is buying 85 percent of Raleigh-based Capital Bank (Nasdaq: CBKN) for $181 million.

North American Financial agreed to pay $2.55 per share.

The news sparked a 40 percent surge, or 66 cents, in Capital Bank stock to $2.30 a share in late morning trading. Shares traded at a one-year high of $6.95 in April and recently hit a one-year low of $1.50.

Capital Bank, which has some $1.6 billion in assets, operates 33 offices across North Carolina. The bank has recently withdrawn attempts to raise additional capital through stock offerings.

R. Eugene Taylor and Michael Moore, the chief executive officer and the chief financial officer of North American Financial, will assume those roles at Capital Bank.

Capital’s current CEO B. Grant Yarber and CFO Christopher Marshall will remain senior executives at Capital, the bank said in a statement.

North American Financial has recently made four other acquisitions.

“Capital Bank has a great history of serving the markets where it operates in North Carolina,” Taylor said in a statement. “We are proud to partner with Capital Bank to further develop its potential in these very strong markets and capitalize on the synergies with our four recent bank acquisitions.”

Yarber said the deal the “capital injection” would enable Capital Bank to “move forward providing expanded opportunities for our customers, our employees, and our shareholders.”

The deal is contingent upon Capital Bank repurchasing or redeeming stock warrants held by the U.S. Treasury Department since Capital did receive $42.3 million through the Troubled Asset Relief Program.

Capital shareholders also could receive up to 75 cents in cash in five years based on the performance of Captial’s existing loan portfolio.

North American Financial recently invested in TIB Financial Corp., MetroBank of Dade County, Turnberry Bank and First National Bank of the South.

Taylor, a 38-year veteran at Bank of America, retired as its vice chairman.

Marshall was CFO and chief operating officer at Bank of America.

Other leaders at North American Financial include R. Bruce Singletary, also a Bank of America veteran, and Kenneth Posner, who worked at Morgan Stanley for 15 years.

Capital Bank, which has some $1.6 billion in assets, operates 33 offices across North Carolina.

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  • james27613 Nov 4, 2010

    GWALLY, your comments could come back to haunt you in legal proceedings!

    I hope you have evidence to back up your claims, otherwise you should issue an apology right now before these men phone their lawyers!

    gwally wrote...
    This list of crooks reads like the who's who of the bailout world of banking!!!

  • rfred16 Nov 4, 2010

    Gwally...uhhhh...No, it doesn't change the truth, which I have already covered fully.

  • Jax is proud to be an American Nov 4, 2010

    Gwally, sounds like you have a case of "I need to get over myself." If you are not involved with this bank what does it matter to you what they do? If you are a share holder then voice your opinion at the next shareholders meeting.

  • GWALLY Nov 4, 2010

    .."Taylor, a 38-year veteran at Bank of America, retired as its vice chairman. Marshall was CFO and chief operating officer at Bank of America. Other leaders at North American Financial include R. Bruce Singletary, also a Bank of America veteran, and Kenneth Posner, who worked at Morgan Stanley for 15 years..."

    This list of crooks reads like the who's who of the bailout world of banking!!!

    ..."since Capital did receive $42.3 million through the Troubled Asset Relief Program...."

    Sort of blows the myth of the sweet, good little neighborhood bank with baked cookies and warm cozy fireside chats in the lobby that was the (sniff, sniff) "victim" of a bad real estate market doesn't it????

  • rfred16 Nov 4, 2010

    Gwally...Hard to argue with ignorance...Read some financials...then get back to me. One clue - take away the troubled real estate loans and Capital has continued to do well otherwise. Oh, and had they NOT made the real estate loans, which by the way, IS the reason they needed the recent outside investment, you would have been the first to say how greedy they were for not loaning away all that taxpayer money they "leached"....Is it banks you have a problem with Gwally, or just capitalism in general??

  • GWALLY Nov 4, 2010

    .."Gwally.....this is not taxpayer money..."It was BECAUSE they are such a good community bank that they got hurt with the real estate collapse...rfred16"

    LOL!!! (and they bear NO responsibility for going down the tubes...it was ALL real estates fault...RIGHT!!!!)

    Fred...I never said this transaction was done with bail out money.....in your haste to defend another bunch of bailed out "bankers" and "financial" gurus with glowing accolades you totally missed the point. Banks and financial "institutions" are leaches..living on taxpayer cash and to date about the only "businesses" that are thriving in an economy that they are DIRECTLY responsible for!!! They should have big signs in their windows apologizing for their greediness and thanking the tax payers that they are STILL here!!!!!

  • Jax is proud to be an American Nov 4, 2010

    Wouldnt you rather have the investors from Charlotte invest their money with Capital Bank rather than have someone outside of NC invest? I would rather someone local invest their money in an NC based company. I would rather put my money with CB than a major lender such as WF or BofA any day. The service is a million times better, they are local and the fresh cookies made each day are wonderful.

  • jomosofe Nov 4, 2010

    As long as they keep the fresh baked cookies in the lobby, I'm happy! Seriously though, I've never enjoyed better more personal service at any other bank or credit union I have been a part of. I also received the letter discussing free checking going away, but I eat at least $8.00 worth of cookies a month, so it didn't bother me.

  • SecksPanther Nov 4, 2010

    ProudAmerican...I received the same letter but I didn't close my account and here is why. All banks are going to this model, the days of free checking are going away thanks to the feds financial reform. Plus, a $500 balance avoids the fee!

  • Mr. Sensible Nov 4, 2010

    BB&T ticked me off and so did Capital One. I'm going to get rid of my Capital One card. More than double my APR when the economy went to grass if you will. I'm not for bailing out every one that was trying to cash in on our economy. See what happened! Some that made foolish loans should go under.

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