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

Posted November 4, 2010 11:55 a.m. EDT
Updated November 4, 2010 3:25 p.m. EDT

— 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 The bank has recently withdrawn attempts to raise additional capital through stock offerings.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.