Tags: capital bank financial | ipo | southern community financial

IPO-bound Capital Bank Financial Expands Further

Tuesday, 27 Mar 2012 03:02 PM

Capital Bank Financial Corp, a U.S. bank holding company that filed plans last year for a public stock offering, has agreed to buy Southern Community Financial Corp in what would be its seventh acquisition since 2010.

Capital, formerly known as North American Financial Holdings Inc, said it agreed to buy the Winston-Salem, North Carolina-based bank for $2.875 per share. Southern Community's shares, which closed on Monday at $1.96, were up 36 percent in early afternoon trading at $2.67.

The acquisition of Southern Community's 22 branches and $1.5 billion in assets would give Capital $8.1 billion in assets and 165 branches in North Carolina, South Carolina, Tennessee, Virginia and Florida. In a sign that Capital is still pursuing an IPO, the bank said the transaction is expected to close in the second quarter of 2012, subject to regulatory approvals and the registration of its common stock.

A spokesman for Capital declined to comment on the company's plans for a stock offering.

Capital, founded by former Bank of America Corp executives Gene Taylor and Chris Marshall, raised $900 million in 2009 to buy troubled banks. In June, the company filed plans to raise as much as $300 million in an IPO.

Like some of the other banks Capital has acquired, Southern Community has yet to pay back government bailout dollars it received during the financial crisis.

The bank received $42.75 million from the Troubled Asset Relief Program in December 2008 and stopped making dividend payments to the government in February 2011 after it reached a consent agreement with regulators designed to shore up its capital base, according to its annual report. The company has also stopped making interest payments on trust preferred securities.

Capital declined to comment on its plans for repaying the U.S. government or for paying interest payments on the trust preferred securities. In the past, Capital has reached agreements with the U.S. Treasury to pay back TARP in full or at a discount.

In the wake of the U.S. financial crisis, North American Financial Holdings was one of a number of private-equity funded ventures that aimed to profit by purchasing and rehabilitating failing banks. With a seventh acquisition in the works, it has been perhaps the most active buyer.

"They certainly are prolific," said Tony Gaeta, a banking lawyer in Raleigh, North Carolina. "I think it's great for the industry. We need capital in the community banking market. The consolidation needs to continue and probably will continue."

The renamed Capital Bank Financial and its banking subsidiary are based in Coral Gables, Florida. North American took the Capital name from a North Carolina bank it took control of last year.

© 2017 Thomson/Reuters. All rights reserved.

 
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2012-02-27
Tuesday, 27 Mar 2012 03:02 PM
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