SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 31, 1999
CAPITAL BANK CORPORATION
(Exact name of registrant as specified in its charter)
North Carolina 0-30062 56-2101930
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification Number)
4400 Falls of Neuse Road, Raleigh, North Carolina,
27609 (address of principal executive offices)
(919)878-3100
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
On April 15, 1999, Capital Bank Corporation (the "Company") filed a Current
Report on Form 8-K reporting, among other things, its acquisition of Home
Savings Bank of Siler City, Inc., SSB ("Home"). The Company indicated in such
report that it would file certain financial information by amendment, as
permitted under Form 8-K, Item 7. The purpose of this amendment is to include
such financial information.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The consolidated statements of financial condition of Home
as of September 30, 1998 and 1997, and the consolidated statements of
operations of Home for the years ended September 30, 1998, 1997, and 1996,
and the Notes thereto, were previously filed, within the meaning of Rule
12b-2 promulgated under the Exchange Act, in the Company's Registration
Statement.
The following unaudited interim consolidated financial
statements of Home as of and for the quarter ended December 31, 1998 are
included herein:
(1) Consolidated Statement of Financial Condition as of
the quarter ended December 31, 1998.
(2) Consolidated Statements of Operations for the
quarters ended December 31, 1997 and 1998.
(3) Consolidated Statements of Cash Flows for the
quarters ended December 31, 1997 and 1998.
(4) Notes to Unaudited Interim Consolidated Financial
Statements.
<PAGE>
HOME SAVINGS BANK OF SILER CITY, INC., SSB
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
December 31, 1998
December 31,
ASSETS 1998
- ------ ----
(Unaudited)
Cash and due from banks $ 766,555
Interest-bearing deposits 557,914
Federal funds sold 11,900,000
------------
Total cash and equivalents 13,224,469
Investment securities available for sale 5,049,768
Mortgage backed securities available for sale 8,665,123
Investment securities held-to-maturity 1,560,000
Loans-net of unearned income 29,025,528
Other assets 1,933,335
------------
Total assets $ 59,458,223
============
LIABILITIES
Deposits $ 48,740,204
Accrued interest payable 261,981
Other liabilities 525,719
ESOP note payable 66,114
------------
Total liabilities 49,594,018
STOCKHOLDERS' EQUITY
Common stock, $1 par value 922,686
Additional paid-in capital 8,191,945
Retained income, substantially restricted 935,242
Unearned ESOP shares (66,114)
Deferred stock awards (194,546)
Accumulated other comprehensive income 74,992
------------
Total stockholders' equity 9,864,205
------------
Total liabilities and stockholders' equity $ 59,458,223
============
<PAGE>
<TABLE>
<CAPTION>
HOME SAVINGS BANK OF SILER CITY, INC., SSB
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended December 31, 1998 and 1997
1998 1997
---- ----
(Unaudited)
Interest and dividend income:
<S> <C> <C>
Interest on loans receivable $ 602,753 $ 619,492
Interest on mortgage backed securities 100,701 78,191
Interest and dividends on investments securities and
bank deposits 304,416 271,702
--------- --------
Total interest and dividend income 1,007,870 969,385
--------- --------
Interest expense:
Deposits 622,818 603,327
ESOP loan 1,213 6,300
Other 1,381 -
--------- --------
Total interest expense 625,412 609,627
--------- --------
Net interest income 382,458 359,758
Provision for loan losses 10,000 -
--------- --------
Net interest income after provision for loan losses 372,458 359,758
Noninterest income:
Loan fees and charges 3,090 7,594
Deposit fees and other charges 7,236 8,035
Other noninterest income 4,273 10,893
--------- --------
Total noninterest income 14,599 26,522
--------- --------
Noninterest expenses:
Compensation and employee benefits 208,402 164,069
Conversion/acquisition expenses 26,285 11,963
Other expenses 172,308 99,653
--------- --------
Total noninterest expenses 406,995 275,685
--------- --------
Net income (loss) before tax expense (19,938) 110,595
Income tax expense (benefit) (9,808) 44,241
--------- --------
Net income (loss) $ (10,130) $ 66,354
========= ========
Earnings per share - basic and diluted $ (0.01) $ 0.07
========= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HOME SAVINGS BANK OF SILER CITY, INC., SSB
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended December 31, 1998 and 1997
1998 1997
---- ----
(Unaudited)
Cash Flows From Operating Activities
<S> <C> <C>
Net income (loss) $ (10,130) $ 66,354
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
MRP amortization 19,089 22,028
ESOP compensation 72,417 49,395
Provision for deferred taxes (36,872) (7,928)
Depreciation 5,553 5,553
Amortization of premium on securities, net 2,214 (3,075)
Changes in other assets and liabilities 86,897 (68,381)
------------ ------------
Net cash provided by operating activities 139,168 63,946
------------ ------------
Cash Flows From Investing Activities
Loan originations, net of principal repayments 1,258,680 (128,290)
Purchase of property, plant and equipment (21,072) -
Principal repayments on mortgage backed securities
available for sale 455,468 131,997
Purchase of mortgage backed securities available for sale (5,078,148) -
Proceeds from maturities of securities available for sale 1,990,088 1,000,000
Proceeds from maturities of securities held to maturity 2,000,000 2,000,000
------------ ------------
Net cash used by investing activities 605,016 3,003,707
------------ ------------
Cash Flows From Financing Activities
Net increase in deposits (305,048) 1,576,131
Principal repayments on ESOP note (56,856) (34,362)
------------ ------------
Net cash provided by financing activities (361,904) 1,541,769
------------ ------------
Net change in cash and cash equivalents 382,280 4,609,422
Cash and cash equivalents:
Beginning 12,842,189 6,008,503
------------ ------------
Ending $ 13,224,469 $ 10,617,925
============ ============
</TABLE>
<PAGE>
ITEM I - FINANCIAL STATEMENTS (CONTINUED)
HOMES SAVINGS BANK OF SILER CITY INC., SSB AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements include the
accounts of the Home Savings Bank of Siler City, Inc., SSB and its
wholly owned subsidiary. All significant intercompany accounts and
transactions have been eliminated. The accompanying unaudited
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of financial position
and results of operations have been made. Operating results for interim
periods are not necessarily indicative of results which may be expected
for a full year. The information included in this Form F-4 should be
read in conjunction with the September 30, 1998 annual consolidated
financial statements and notes thereto.
2. COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income ("SFAS No. 130"). SFAS No. 130 establishes
requirements for the disclosure of comprehensive income in interim
financial statements. Comprehensive income is defined as net income
plus transactions and other occurrences which are the result of
nonowner changes in equity. For the Bank, nonowner equity changes are
comprised of unrealized gains or losses on debt securities that will be
accumulated with net income in determining comprehensive income.
This statement does not impact the historical financial results of the
Bank's operations and is effective for years beginning after December
15, 1997. Reclassification of financial statements for earlier periods
provided for comparative purposes is required. Adoption of this
standard as of October 1, 1998 did not have an impact on the Bank's
results of operations.
Other comprehensive income (loss) changes for the three month periods
ended December 31, 1998 and 1997 were $20,705 and $64,271,
respectively. Comprehensive income (loss) for the respective periods
was $30,835 and $130,625.
3. EARNINGS PER SHARE
The following table provides a reconciliation of income (loss)
available to common stockholders, and the average number of shares
outstanding (less unearned ESOP shares) for the three months ended
December 31, 1998 and 1997.
1998 1997
---- ----
Net income (loss) (numerator) $ (10,130) $ 66,354
========= ========
Shares for basic EPS (denominator) 907,806 898,283
Dilutive effect of stock options - 10,199
--------- --------
Adjusted shares for diluted EPS 907,806 908,482
========= ========
<PAGE>
(b) PRO FORMA FINANCIAL INFORMATION.
The pro forma combined condensed balance sheet of Home
and Capital Bank as of December 31, 1998, and the unaudited pro forma combined
condensed statements of operations for the year ended December 31, 1998 and
period ended December 31, 1997 are included herein.
<PAGE>
Capital Bank and Home Savings Bank
Combined Pro Forma Condensed Balance Sheets
December 31,1998
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Home Savings
Capital Bank Bank Adjustments Consolidated
------------------ --------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Assets
Cash and Due from Banks $ 9,041 $ 1,324 $ - $ 10,365
Investment Securities 21,996 15,630 37,626
Federal Funds Sold 4,500 11,900 16,400
Loans and Leases 81,434 29,345 110,779
Less: Allowance for Loan Losses (1,138) (319) (1,457)
Net Loans 80,296 29,026 109,322
Premise and Equipment 2,309 283 2,592
Intangible Assets 1,833 0 1,833
Other Assets 856 1,295 (296)(1) 1,855
---------------- ----------------- --------------- -----------------
Total Assets $ 120,831 $ 59,458 $ (296) $ 179,993
================ ================= =============== =================
Liabilities and Shareholders' Equity
Noninterest Bearing Demand $ 7,483 $ 56 $ - $ 7,539
Savings and Interest Bearing Demand 23,709 11,980 35,689
Time Deposits 57,411 36,704 94,115
Total Deposits 88,603 48,740 137,343
Borrowings 5,000 66 5,066
Other Liabilities 3,289 788 1,647 (2) 5,724
------------------ ---------------- --------------- -----------------
Total Liabilities 96,892 49,594 1,647 148,133
Shareholders' Equity 23,939 9,864 (1,943)(3) 31,860
------------------ ---------------- --------------- -----------------
Total Liabilities and Shareholders' Equity $ 120,831 $ 59,458 $ (296) $ 179,993
================ ================= =============== =================
Notes:
(1) Adjustment reflects the effect of the reserving of deferred tax assets for Home Savings Bank due to
consolidated net operating losses.
(2) Adjustment for Capital Bank's and Home Savings' investment advisor fees and acceleration of Home Savings'
director and executive retirement plans. Note there is no deferred tax effect due to consolidated net operating
losses.
(3) Adjustment reflects the effect on capital of above two adjustments.
</TABLE>
<PAGE>
Capital Bank and Home Savings Bank
Combined Pro Forma Condensed Statements of Operations
Year Ended December 31, 1998
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Home Savings
Capital Bank Bank Adjustments Consolidated
------------------ ----------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Interest Income
Loans $ 4,729 $ 2,524 $ - $ 7,253
Investments and federal funds sold 1,743 1,543 - 3,286
------------------ ------------------ ----------------- -------------------
Total Interest Income 6,472 4,067 - 10,539
Interest Expense
Deposits 3,038 2,449 - 5,487
Borrowings 25 17 - 42
------------------ ------------------ ----------------- -------------------
Total Interest Expense 3,063 2,466 - 5,529
Net Interest Income 3,409 1,601 - 5,010
Provision for Loan Losses 752 40 - 792
------------------ ------------------ ----------------- -------------------
Net Interest Income after Provision
for Loan Losses 2,657 1,561 - 4,218
Noninterest Income 640 72 - 712
Noninterest Expenses 4,421 1,395 - 5,816
------------------ ------------------ ----------------- -------------------
Net Income before Taxes (1,124) 238 - (886)
Income Taxes - 70 (60)(1) 10
------------------ ------------------ ------------------ ------------------
Net Income (Loss) $ (1,124) $ 168 $ 60 $ (896)
================== ================== ================== ==================
Notes:
(1) Adjustment reflects the income effect of the reserving of deferred tax assets for Home Savings Bank due to
consolidated net operating losses.
</TABLE>
<PAGE>
Capital Bank and Home Savings Bank
Combined Pro Forma Condensed Statements of Operations
Period Ended December 31, 1997
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Capital Home Savings
Bank (1) Bank Adjustments Consolidated
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Interest Income
Loans $ 815 $ 2,488 $ - $ 3,303
Investments and federal funds sold 1,002 1,406 - 2,408
------------------- ----------------- ------------------ ------------------
Total Interest Income 1,817 3,894 - 5,711
Interest Expense
Deposits 663 2,247 - 2,910
Borrowings 6 26 - 32
------------------ ------------------ ------------------ ------------------
Total Interest Expense 669 2,273 - 2,942
Net Interest Income 1,148 1,621 - 2,769
Provision for Loan Losses 270 0 - 270
------------------ ------------------ ------------------ ------------------
Net Interest Income after Provision
for Loan Losses 878 1,621 - 2,499
Noninterest Income 146 88 - 234
Noninterest Expenses 1,746 1,240 - 2,986
------------------ ------------------ ------------------ ------------------
Net Income before Taxes (722) 469 - (253)
Income Taxes 0 152 85 (2) 237
------------------ ------------------ ------------------ ------------------
Net Income (Loss) $ (722) $ 317 $ (85) $ (490)
================== ================== ================== ==================
Notes:
(1) Income statement amounts for Capital Bank are presented for the period from June 20, 1997
(opening day) to December 31, 1997.
(2) Adjustment reflects the income effect of the reserving of deferred tax assets for Home Savings Bank due to
consolidated net operating losses.
</TABLE>
<PAGE>
(c) EXHIBITS.
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 10, 1999
CAPITAL BANK CORPORATION
By: /s/ James A. Beck
------------------------
James A. Beck
President and Chief Executive Officer
