News 
Market Data 
Discover
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
|
Followers
|
0
|
Posters
|
|
|
Posts (Today)
|
0
|
Posts (Total)
|
1
|
|
Created
|
03/20/12
|
Type
|
Free
|
| Moderators | |||
NAFH Investment
On September 7, 2011, the Company completed the issuance and sale of 119.9 million shares of its common stock to NAFH for approximately $217 million in consideration. The consideration included $147.6 million of cash and NAFH's contribution of the Company's Series A Preferred Stock and warrant to purchase shares of common stock issued to the U.S. Treasury through the TARP, which were repurchased by NAFH.
Financial results for the first nine months of 2011 were significantly impacted by the controlling investment in the Company by NAFH. The Company applied push-down accounting. Accordingly, the Company's assets and liabilities were adjusted to estimated fair values at the NAFH Investment date, resulting in elimination of the allowance for loan losses. The Company is still in the process of completing its fair value analysis of assets and liabilities, and final fair value adjustments may differ from the preliminary estimates recorded to date. Balances and activity in the Company's consolidated financial statements prior to the NAFH Investment have been labeled with "Predecessor Company" while balances and activity subsequent to the NAFH Investment have been labeled with "Successor Company."
Bank Merger
On September 7, 2011, GreenBank, which was formerly a wholly owned subsidiary of the Company, merged (the "Bank Merger") with and into Capital Bank, NA, a national banking association and subsidiary of TIB Financial Corp. ("TIB Financial"), a corporation organized under the laws of the State of Florida, Capital Bank Corporation, a corporation organized under the laws of the state of North Carolina ("Capital Bank Corp.") and NAFH, with Capital Bank, NA as the surviving entity. NAFH is the owner of approximately 90% of the Company's common stock, approximately 83% of Capital Bank Corp.'s common stock and approximately 94% of TIB Financial's common stock.
Capital Bank, NA (formerly NAFH National Bank) was formed on July 16, 2010, in connection with the purchase and assumption of assets and deposits of three banks - Metro Bank of Dade County (Miami, Florida), Turnberry Bank (Aventura, Florida) and First National Bank of the South (Spartanburg, South Carolina) - from the Federal Deposit Insurance Corporation (the "FDIC") and is a party to loss sharing agreements with the FDIC covering the large majority of the loans it acquired from the FDIC. As of September 30, 2011, Capital Bank, NA had total assets of $6.6 billion, total deposits of $5.3 billion and shareholders' equity of $931.1 million. As of September 30, 2011, following the Bank Merger, Capital Bank, NA operated 146 branches in Tennessee, Florida, North Carolina, South Carolina, and Virginia.
The Bank Merger occurred pursuant to the terms of an Agreement and Plan of Merger entered into by and between the Bank and Capital Bank, NA, dated as of September 7, 2011 (the "Merger Agreement"). In the Merger, each share of Bank common stock was converted into the right to receive shares of Capital Bank, NA common stock. As a result of the Merger, the Company now owns approximately 34% of Capital Bank, NA, with NAFH owning 19%, Capital Bank Corp. owning 26% and TIB Financial owning the remaining 21%.
Due to its ownership level and significant influence, the Company's investment in Capital Bank, NA is recorded as an equity-method investment in that entity. As of September 30, 2011, the Company's investment in Capital Bank, NA totaled $312.4 million, which reflected the Company's pro rata ownership of Capital Bank, NA's total shareholders' equity as a result of the Bank Merger. In periods subsequent to the Bank Merger, the Company will adjust this equity investment balance based on its equity in Capital Bank, NA's net income and comprehensive income. In connection with the Bank Merger, assets and liabilities of GreenBank were deconsolidated from the Company's balance sheet, resulting in a significant decrease in total assets and total liabilities of the Company in the third quarter of 2011.
Financial Discussion
The Company reported a net loss available to common shareholders for the period from July 1, 2011 through September 7, 2011, of $9.8 million compared to a net loss of $12.4 million for the second quarter of 2011 and a net loss of $36.4 million for the third quarter of 2010. For the period from September 8, 2011 through September 30, 2011, the Company reported net income of $930 thousand. Financial results prior to the September 7th NAFH Investment have been labeled with "Predecessor Company" while results subsequent to the NAFH Investment have been labeled with "Successor Company."
Due to the difference in lengths of reporting periods and the Merger discussed above and the resulting deconsolidation of GreenBank on September 7, 2011, the operating results for the period from July 1, 2011 through September 7, 2011, only include the results of GreenBank for approximately two months and therefore are generally not comparable to the operations in prior quarters.
The loss reported in the period from July 1, 2011 through September 7, 2011, was primarily due to a $15.5 million provision for loan losses and $14.7 million in foreclosed asset related expenses. The loss reported in the second quarter of 2011 was primarily due to a $14.3 million provision for loan losses and $6.3 million in foreclosed asset related expenses, while the loss reported in the third quarter of 2010 was primarily due to a $36.8 million provision for loan losses and $7.8 million in foreclosed asset related expenses.
The net interest margin for the period from July 1, 2011 through September 7, 2011, was 3.91%, up a modest 0.01% versus the second quarter of 2011. Subsequent to the deconsolidation of GreenBank on September 7, 2011, the net interest margin is not meaningful as the Company has no interest earning asset. As the Company accounts for its investment in Capital Bank, NA using the equity method, the Company's proportional share of the net after tax earnings of Capital Bank, NA is recorded as Equity in income of Capital Bank, NA, which for the period from September 8, 2011 through September 30, 2011, was $1.1 million.
About Green Bankshares
Headquartered in Greeneville, Tennessee, Green Bankshares, Inc. is a financial services company with a 34% equity method investment in Capital Bank, NA, a national banking association with approximately $6.6 billion in total assets and 146 branches serving communities in Tennessee, Florida, North Carolina, South Carolina, and Virginia.
