Raleigh-based Capital Bank reported today net income of $1.3 million during the second quarter, its second earnings release since North American Financial Holdings acquired a majority stake in the business in exchange for a $181 million investment.

That amounted to earnings of one cent per share. 

In its first earnings release earlier this year Capital reported a lost of $574,000.

The company adopted new accounting standards after the acquisition that significantly affected its results, so comparisons with year-ago results are skewed.

As of the acquisition date, Capital's allowance for loan losses was eliminated.

The North American deal pumped much-needed capital into the bank, which was being pressured by regulators to shore up its finances in the wake of its struggles after the recession hit.

"I am pleased with the bank's progress in new loan originations and core deposit growth, which should set the state for continued improvements in profitability," said Gene Taylor, the chairman and CEO of both Capital and NAHF, in a release.

Piedmont Center Investments, a Raleigh company that owns seven shopping centers in central and eastern North Carolina, has filed for Chapter 11 bankruptcy.

The company reported assets of $27.2 million and liabilities of $15.5 million.

Piedmont's largest creditor is Capital Bank, which is owed $1.9 million. The company also owes property taxes to a number of towns and counties.

Piedmont's shopping centers are in Gibsonville, Graham, Murfreesboro, Nashville, Pittsboro, Roxboro and Mebane.

Reo Management Services, the company that manages Piedmont's properties, did not immediately return a call seeking comment this afternoon.

The investment firm that bought Raleigh-based Capital Bank this year has filed plans for an initial public offering of stock, Charlotte Observer staff writer Rick Rothacker reports.

North American Financial Holdings is seeking to raise as much as $300 million by selling shares on Wall Street.

Its filing with the Securities and Exchange Commission, as is typical, does not yet say how many shares the company will issue, what the initial price will be and what ticker symbol the company will trade under.

NAFH is a bank holding company led by former Bank of America executives Gene Taylor and Chris Marshall that raised $900 million from investors in 2009 to buy troubled banks. Since last summer, the executives have bought five banks in the Carolinas and Florida and have a deal pending to acquire a Tennessee-based bank.

NAFH plans to consolidate its banking subsidiaries under the name Capital Bank.

Read the full Charlotte Observer story here.

Charlotte-based North American Financial Holdings has signed a definitive agreement to take a 90 percent stake in a Greenville, Tenn.-based bank for $217 million, reports Rick Rothacker, the banking reporter at the Charlotte Observer.

Green Bankshares has 65 branches and $2.4 billion in assets.

The deal would be the sixth for North American, which is led by former Bank of America executives Gene Taylor and Chris Marshall. North American is consolidating its purchases under the banner of Capital Bank, the Raleigh bank it bought last year.

With the latest addition, North American would have $7.3 billion in assets in the Carolinas, Tennessee and Florida.
 

Capital Bank's eight outside directors will receive rich payments if the Raleigh bank's deal with a private investor goes through.

Earlier this month, Capital announced that North American Financial Holdings had agreed to pay $2.55 per share, or $181 million, to buy a majority stake in the struggling bank. Capital shareholders are scheduled to vote on the deal Dec. 16.

If completed, the deal will trigger lump-sum payments for Capital's directors worth a total of $2.2 million, the company reported in a Securities and Exchange Commission filing late today. That money is based on a "change in control" clause in the directors' retirement benefits.

Capital chairman O.A. Keller III would receive $891,104. Keller is CEO of Earthtec of NC, an environmental treatment facility in Sanford. He has been a Capital director since the bank started in 1997.

Capital Bank, which is anticipating pressure from regulators to shore up its finances, today withdrew a stock offering that would have done just that.

The Raleigh bank said that it was withdrawing the public offering "in order to pursue certain other alternatives."

One possibility, which Capital noted in its filing with the Securities and Exchance Commission, is pursuing a private sale of stock. A private sale would enable a single investor to acquire a bigger stake in the bank than a public offering allows.

Another possibility is selling the bank to a larger competitor or a bank that is seeking entree into the bank's markets. Capital has 32 branches across the state.

Capital also planned a stock sale earlier this year but canceled it in January because of "unfavorable market conditions." The absence of similar language this time around could be a sign that the bank remains intent on selling its shares at the prevailing price -- but privately, rather than through a public offering.

Capital Bank disclosed that it expects to receive orders from state and federal banking regulators to clean up its finances.

If issued a so-called Memorandum of Understanding, or MOU, from the N.C. Banking Commission and FDIC, the Raleigh-based bank would be required to improve its liquidity, reduce its real-estate loans, strengthen its loan guidelines and take other steps to improve its financial health.

The disclosure raises questions about Capital's business. It also throws up another obstacle as the bank seeks to raise millions of dollars by selling more of its stock on Wall Street.

Capital Bank is seeking to raise more than $100 million to shore up its finances, make new loans as the economy recovers and pay for future expansion.

The Raleigh-based community bank scrapped a plan earlier this year to raise $55 million to finance acquisitions, citing poor market conditions. In March, the company raised $8.5 million from private investors.

This morning the bank filed plans to sell 34.5 million new shares on Wall Street. The final amount raised will depend on how much investors are willing to pay.

The bank's stock, which has lost more than half its value in the past year, fell 93 cents to $2.58 this morning.

Capital Bank this morning reported a $7.8 million net loss during the fourth quarter and suspended its dividend as the Raleigh-based bank is hit by loan losses and higher expenses.

The quarterly results were an improvement from the same period a year earlier for the company, which operates 32 branches across North Carolina. But like many community banks, Capital Bank is struggling during the recession.

The company's board voted to suspend paying a quarterly dividend to save money, a move that could further depress its stock. Earlier this month, Capital canceled a plan to raise as much as $55 million by selling shares, citing stock market conditions.

Capital's shares fell 67 cents today to $3.49 and are down nearly 30 percent in the past year.

“Weakness in local residential and commercial real estate markets continues to severely impact the financial health and stability of many businesses within the communities we serve,” said CEO B. Grant Yarber, in a prepared statement.

Capital Bank of Raleigh plans to sell nearly 10 percent of its shares to a private equity fund in Philadelphia.

Patriot Financial Partners has agreed to buy 9.9 percent of Capital Bank's common stock at the same time the bank sells about $55 million worth of shares in a secondary offering. That deal is expected to close before Feb. 1.

As part of the deal, Patriot will appoint one director to Capital Bank's board. The firm focuses on investing in thrifts and community banks run by "strong management teams with successful track records," according to its Web site.

Bringing in an independent private equity firm could help Capital Bank officials sell its public offering to other investors. Capital Bank CEO B. Grant Yarber and Patriot partner James Lynch declined to comment, citing securities regulations related to stock sales by publicly traded companies.