Capital Bank in Fla. Boosts 4Q Profit Despite M&A Charges

Capital Bank Financial (CBF) of Coral Gables, Fla., marked its first full quarter as a public company with an increase in profits that fell short of expectations.

The company announced Wednesday that its fourth-quarter profit more than quadrupled, to $5.3 million, compared with the fourth quarter of 2011. Per-share earnings of 10 cents were 5 cents lower than the consensus estimate of analysts polled by Bloomberg.

The parent of Capital Bank, which has $7.3 billion of assets and 164 branches, recorded $6.5 million in conversion costs associated with its purchase of Southern Community in North Carolina, founder awards, severance costs and other merger expenses. Capital Bank fully absorbed Southern Community on Nov. 10, a spokesman said.

These charges were offset by a $12 million decrease in the company's provision for loan losses, to $4.4 million in the fourth quarter.

Capital Bank's net interest income decreased by 4%, to $66 million, as net interest margin contracted by 22 basis points, to 4.11%. Chargeoffs held steady at $1 million.

The bank's noninterest income declined 4%, to $15.3 million, as lower earnings from investment and Federal Deposit Insurance Corp. asset accretion offset higher income from service charges and mortgage fees.

The bank's noninterest expenses rose 13% on higher compensation expenses and foreclosure costs.

Capital Bank's initial public offering raised $179 million, or $18 per share, in September. It had sought to sell the shares at $21 to $23 apiece. Its shares closed Wednesday at $16.11, down more than 3%.