Capital Bank Financial (CBF) in Coral Gables, Fla., will revise certain financial statements in its 2012 annual report to reflect a better-than-expected balance sheet tied to a bank it bought.
The $6.7 billion-asset company disclosed in a regulatory filing Tuesday that the changes will reflect adjustments to the estimated fair values of assets from Southern Community Financial in Winston-Salem, N.C., which it bought in October 2012.
Capital Bank said it concluded in the third quarter of this year that the underlying asset quality of Southern Community's loan portfolio "should lead to better credit performance than originally anticipated." As a result, Capital Bank increased the estimated fair value of the loan portfolio and the associated contingent value right liability. The company also decreased the deferred-tax asset tied to the increased value of loans, along with the goodwill caused by the net effect of the adjustments.
In presentation materials included in the regulatory filing, Capital Bank said it had reduced the size of the special assets portfolio associated with all of its acquired banks by 28% this year, to $779 million at Sept. 30. As a result, expenses tied to those loans are down 36% compared to a year earlier.