Capital Bank Financial in Charlotte, N.C., will record a first-quarter $5.5 million net loss, after it agreed to an early termination of its loss-share agreements tied to three failed banks.
The $7.4 billion-asset company paid $3 million to the Federal Deposit Insurance Corp. to end the agreements. Capital Bank will record an after-tax charge of about $5.5 million in the first quarter, to cover the payment and the write-off of the remaining FDIC indemnification asset.
The early termination will eliminate the indemnification asset, related receivable and accrued clawback liability, totaling a net amount of $6 million as of Dec. 31. Capital Bank will benefit from the reduction in FDIC amortization expense and other related expenses, to the order of about $500,000 per quarter.
The assets that had been covered by the FDIC loss-share agreements, totaling $74.1 million, will be re-classified as noncovered assets, retroactive to Jan. 1.
Capital Bank Financial in July 2010 acquired three failed banks: Turnberry Bank in Aventura, Fla.; Metro Bank of Dade County in Miami; and First National Bank of the South in Spartanburg, S.C. At the time, Capital Bank Financial was known as North American Financial Holdings.