Capital Bank Reports Record Earnings


Capital Bank Reports Record Earnings

Pre-Tax Income Balloons 80%

Loans Swell 40%, Assets Grow 23%

SAN JUAN CAPISTRANO, Calif.--(BUSINESS WIRE)-- Capital Bank (OTCBB:CBJC) today announced results of operations for the fourth quarter and year ending 2012 marked by record pre-tax earnings, exceptional loan growth and continued asset expansion. Pre-tax income ballooned 80% to almost $2 million compared to 2011 pre-tax income of $1.1 million. The Bank became taxable for book purposes for the full year of 2012 and recognized $866,000 in tax expense, producing net after tax income of $1.1 million for the year. Assets expanded 23% to $142.2 million while loans swelled an impressive 40%, or $27.8 million, to $97.3 million.

J.M. "Mike" Justice Jr., President & Chief Executive Officer, stated: "Five years ago today, in the midst of the most tumultuous times in economic history, we successfully closed our Initial Public Offering. Since that time, our Bank has thrived, while many others fought for survival, or failed. Our performance this past year demonstrates the strength of our business model. We were successful in expanding our loan portfolio by over 40%, while still maintaining our conservative underwriting standards as evidenced by our strong asset quality, producing a 36% increase in net interest income and reducing our need for loan sale premium income. This approach produces a dependable and ongoing income stream which has resulted in an 80% increase in pre-tax income. Our Pre-Tax Return on Average Assets (ROA) of almost 1.6% and Return on Average Equity (ROE) for our shareholders of almost 13% is highly satisfactory and significantly outperforms our peers. Our continued strong growth in assets and loans combined with ongoing and expanding profitability is a testament to the hard work and dedication of our entire team. The prospects for further growth, expansion and profitability are bright for our Bank." Mr. Justice continued: "Our capital position continues to be exceptionally strong with total risk based capital of 20%, double the regulatory standard of 10% to be considered well capitalized. We continue to carry the 5 Star Rating of Excellencefrom the nationally recognized independent bank rating firm of Bauer Financial, which is indicative of the safety of our Bank for our depositors. The strength of our growing capital base driven by ongoing earnings, combined with the quality of our balance sheet should provide comfort to our customers that we are here for them today, tomorrow and for many years to come."

Mr. Justice continued, "Our solid profitability, combined with the growth of our fortress like balance sheet, supported by a strong capital base and growing market share have been noted by the capital markets; we are very pleased with our stock which continues to out-perform our peers."

John R. McGill, Senior Executive Vice President & Chief Operating Officer, stated: "We are very optimistic about our opportunities for growth and expansion. Our solid income stream provides the needed capital to fuel loan and asset growth which will further enhance income and shareholder value. Our highly productive U.S. Small Business Administration Loan Department continues to be one of the most active and productive SBA lenders in the State and is in the top 100 in the Nation. Our SBA team has done an exceptional job providing the much needed financing to fuel job growth for the communities we serve. We have money to lend." McGill commented further: "Our success in achieving solid profitability, building a quality balance sheet, and leveraging our strong capital base is attributable to the dedication of our employees, the support of committed directors, shareholders and our broadening base of loyal customers. We are thankful for their ongoing confidence and support."

Capital Bank is dedicated to being known as the Premier Business and Professional Bank in the markets we serve by providing innovative financial solutions tailored to the needs of our customers while exceeding expectations and producing superior shareholder value that become solutions recognized for..."Banking Outside the Box".

For Additional Information visit our website at:

Stock Symbol: OTCBB:CBJC

Market Makers:

Crowell Weedon & Company

Contact: Steve Arrigo, Senior Vice President (949) 644-1890

Raymond James & Associates

Contact: Doug Deubel, Vice President (888) 734-0540

Bauer Financial:

Information contained herein may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Bank's earnings in future periods. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "intend," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may." Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the Bank's operations, pricing, products and services. The Bank undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.



(All figures in thousands) as of:

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Capital Bank
J.M."Mike" Justice Jr., President & C.E.O.
(949) 489-4202
John R. McGill, Senior Executive Vice President & C.O.O.
(949) 489-4203

KEYWORDS: United States North America California


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