updated 4/28/2011 7:46:30 AM ET 2011-04-28T11:46:30

GREENWOOD, S.C., April 28, 2011 (GLOBE NEWSWIRE) -- Community Capital Corporation (Nasdaq:CPBK) reports operating results for the three months and quarter ended March 31, 2011.

  • Merger with Park Sterling Corporation (Nasdaq:PSTB) announced on March 31, 2011
  • Net income was $1.0 million for the quarter, resulting in an annualized ROA of 0.64%
  • Although significant cash liquidity continues to be maintained, net interest margin increased 16 basis points from 3.26% for the quarter ended December 31, 2010 to 3.42% for the quarter ended March 31, 2011
  • Noninterest bearing deposits comprised 22.35% of total deposits at March 31, 2011 versus 17.54% at March 31, 2010
  • Capital levels remained above regulatory requirements to be considered "well capitalized" as the total risk based capital ratio increased to 12.73% at March 31, 2011 from 12.17% at December 31, 2010, and the Tier 1 leverage capital ratio grew to 8.31% at March 31, 2011 from 7.77% at December 31, 2010
  • Nonperforming asset and nonperforming loan totals have declined versus December 31, 2010 and March 31, 2010 levels
  • Allowance for loan losses coverage to nonaccrual loans was 56.05% at March 31, 2011, and allowance for loan losses coverage to gross loans remained above 3%
  • Wealth Management Group assets increased 28.10% to $693 million at March 31, 2011 versus $541 million at March 31, 2010

Community Capital Corporation today reported net income for the three months ended March 31, 2011 of $1,022,000, or $0.10 per diluted share, compared to net income of $1,600,000, or $0.16 per diluted share, for the same period in 2010. The company recorded provision for loan losses of $600,000 during the first quarter of 2011 compared to $1.6 million during the first quarter of 2010.

Total assets decreased $96,702,000, or 12.97%, to $649,135,000 at March 31, 2011 from $745,837,000 as of March 31, 2010, and decreased $6,799,000, or 1.04%, from $655,934,000 at December 31, 2010. Total loans decreased $84,032,000, or 15.31%, to $464,978,000 at March 31, 2011 from $549,010,000 at March 31, 2010, and decreased $14,415,000, or 3.01%, from $479,393,000 at December 31, 2010. Total deposits decreased $91,481,000, or 15.81%, to $487,015,000 at March 31, 2011 from $578,496,000 at March 31, 2010, and decreased $8,167,000, or 1.65%, from $495,182,000 at December 31, 2010. 

William G. Stevens, President and Chief Executive Officer of Community Capital Corporation stated, "We are pleased to report a stabilizing trend in asset quality, coupled with an increasing net interest margin and higher capital ratios. Additionally, we continue to grow noninterest income, primarily via our Wealth Management area. While our first quarter ROA does not exceed the 1% level we achieved a few years ago, our earnings performance should compare favorably to our southeastern peers.

"Our board and management team are working toward the completion of our announced merger with Park Sterling Corporation, which is expected to occur during the third quarter of 2011. It is more and more evident that the individual visions of each company are very similar and we believe that combining forces with Park Sterling Corporation will result in the realization of both."

ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT

In connection with the proposed merger referenced above, Park Sterling Corporation ("Park Sterling") will file with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 that will include a Proxy Statement of Community Capital Corporation (the "Company") and a Prospectus of Park Sterling, as well as other relevant documents concerning the proposed transaction. SHAREHOLDERS ARE STRONGLY URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN THEY BECOME AVAILABLE AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER. A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about the Company and Park Sterling, may be obtained after their filing at the SEC's Internet site (http://www.sec.gov). In addition, free copies of documents filed with the SEC may be obtained on the respective websites of the Company and Park Sterling at www.capitalbanksc.com and www.parksterlingbank.com.

Participants in Solicitation

The Company and Park Sterling and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company's shareholders in connection with this transaction. Information about the directors and executive officers of the Company and Park Sterling and information about other persons who may be deemed participants in this solicitation will be included in the Proxy Statement/Prospectus. Information about the Company's executive officers and directors can be found in the Company's Form 10-K/A for the year ended December 31, 2010 filed with the SEC on April 26, 2011. Information about Park Sterling's executive officers and directors can be found in Park Sterling's definitive proxy statement in connection with its 2011 Annual Meeting of Shareholders filed with the SEC on April 12, 2011.

About Community Capital Corporation

Community Capital Corporation is the parent company of CapitalBank, which operates 18 community oriented branches throughout upstate South Carolina and offers a full array of banking services, including a diverse wealth management group. Additional information on CapitalBank's locations and the products and services offered are available at www.capitalbanksc.com . The Company's shares are traded on NASDAQ under the symbol CPBK.

About Park Sterling Corporation

Park Sterling Corporation is the holding company for Park Sterling Bank, headquartered in Charlotte, North Carolina. Park Sterling Bank's primary focus is to provide banking services to small and mid-sized businesses, owner occupied and income producing real estate owners, professionals, and other customers doing business or residing within its target areas. Park Sterling Bank is committed to building a banking franchise across the Carolinas and Virginia that is noted for sound risk management, superior client service and exceptional client relationships. For further information, visit www.parksterlingbank.com . Park Sterling's shares are traded on NASDAQ under the symbol PSTB.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements about the Company which we believe are within the meaning of the Private Securities Litigation Reform Act of 1995. This release contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company and statements about the proposed merger with Park Sterling. 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," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may" or words of similar meaning. These forward-looking statements, by their nature, are subject to risks and uncertainties. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) the potential that loan charge-offs may exceed the allowance for loan losses or that such allowance will be increased as a result of factors beyond our control; (2) our ability and success in resolving troubled loans; (3) adverse conditions in the stock market, the public debt market, and other capital markets (including changes in interest rate conditions); (4) changes in deposit rates, the net interest margin, and funding sources; (5) the strength of the U.S. economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio and allowance for loan losses; (6) changes in the U.S. legal and regulatory framework, including the effect of recent financial reform legislation on the banking industry; (7) or dependence on senior management; (8) competition from existing financial institutions operating in our market areas as well as the entry into such areas of new competitors with greater resources, broader branch networks and more comprehensive services; (9) risks inherent in making loans including repayment risks and value of collateral; (10) fluctuations in consumer spending and saving habits; (11) the demand for our products and services; (12) the challenges and uncertainties in the implementation of our expansion and development strategies; (13) the adequacy of expense projections and estimates of impairment loss; (14) unanticipated regulatory or judicial proceedings; (15) the timely development and acceptance of products and services, including products and services offered through alternative delivery channels such as the Internet; and (16) the potential failure to obtain shareholder and regulatory approval for the merger with Park Sterling or to satisfy other conditions to the merger on the terms set forth in the merger agreement or within the proposed timeframes.

Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in the Company's reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC's Internet site ( http://www.sec.gov ).  All references to financial information as of December 31, 2010 are derived from our Annual Report on Form 10-K for the year ended December 31, 2010. All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

 
 
SUMMARY CONSOLIDATED FINANCIAL DATA
       
Financial Highlights Three Months  Three Months  Three Months 
(Dollars in thousands, except per share data) Ended Ended Ended
  March 31 December 31 March 31
  2011 2010 2010
Earnings Summary (Unaudited) (Unaudited) (Unaudited)
       
Interest income $6,941 $7,219 $8,258
Interest expense 2,014 2,198 2,932
Net interest income 4,927 5,021 5,326
Provision for loan losses 600 12,000 1,600
Noninterest income 2,116 2,160 3,347
Noninterest expense 4,997 5,908 4,787
Income (loss) before taxes 1,446 (10,727) 2,286
Income tax expense (benefit) 424 (3,767) 686
Net income (loss) $1,022 $(6,960) $1,600
       
Per Shares Ratios:      
Basic earnings (loss) per share $0.10 $(0.70) $0.16
Diluted earnings (loss) per share $0.10 $(0.70) $0.16
Book value per share $4.86 $4.73 $5.55
       
Common Share Data:      
Outstanding at period end 10,060,777 10,016,648 9,921,321
Weighted average outstanding 10,017,607 9,971,939 9,852,026
Diluted weighted average outstanding 10,036,146 9,971,939 9,894,888
       
Capital Ratios:      
Tier 1 leverage ratio 8.31% 7.77% 8.43%
Tier 1 risk-based capital ratio 11.46% 10.89% 11.67%
Total risk-based capital ratio 12.73% 12.17% 12.94%
Tangible equity to tangible assets (period end) 7.39% 7.12% 7.19%
       
Balance Sheet Highlights      
(Dollars in thousands)      
       
Average Balances:      
Total assets $650,381 $677,334 $749,768
Earning assets 590,229 615,280 685,008
Loans 475,989 497,550 560,249
Deposits 488,673 509,186 582,109
Interest bearing deposits 381,610 408,113 471,191
Noninterest bearing deposits 107,063 101,073 110,918
Other borrowings 95,400 95,400 95,400
Junior subordinated debentures 10,310 10,310 10,310
Shareholders' equity 48,549 55,316 54,396
       
Performance Ratios:      
Return on average assets 0.64% (4.08)% 0.87%
Return on average shareholders' equity 8.53% (49.92)% 11.93%
Net interest margin (fully tax equivalent at 38%) 3.42% 3.26% 3.19%
Efficiency ratio 72.77% 81.89% 59.44%
       
Asset Quality:      
Nonperforming loans  $26,964 $27,531 $32,628
Other real estate 13,691 13,496 8,833
 Total nonperforming assets 40,655 41,027 42,755
Total impaired loans  34,420 39,385 77,469
Total performing troubled debt restructurings  948 3,436 13,307
Net charge-offs/write-downs 2,654 8,148 1,742
Net charge-offs/write-downs to average loans 0.56% 1.64% 0.31%
Allowance for loan losses to nonperforming loans 56.05% 62.35% 41.32%
Nonperforming loans to total loans 5.80% 5.74% 6.18%
Nonperforming assets to total assets 6.26% 6.25% 5.73%
Allowance for loan losses to period end loans 3.25% 3.58% 2.55%
       
Other Selected Ratios:      
Average equity to average assets 7.46% 8.17% 7.26%
Average loans to average deposits 97.40% 97.71% 96.24%
Average loans to average earning assets 80.64% 80.87% 81.79%
       
       
Balance Sheet Data      
(Dollars in thousands) Period Ended Period Ended  Period Ended
  March 31 December 31 March 31
  2011 2010 2010
  (Unaudited)   (Unaudited)
Assets:      
Cash and cash equivalents:      
 Cash and due from banks $11,079 $9,315 $10,384
 Interest bearing deposit accounts 43,580 27,860 60,002
 Total cash and cash equivalents 54,659 37,175 70,386
Investment securities:      
 Securities held-for-sale 67,197 74,025 67,764
 Securities held-to-maturity - - 160
 Nonmarketable equity securities 9,416 9,626 10,364
 Total investment securities 76,613 83,651 78,288
Loans held for sale 1,781 5,516 1,396
Loans receivable 464,978 479,393 549,010
Allowance for loan losses (15,112) (17,165) (14,018)
Other real estate owned 13,691 13,496 8,833
Premises and equipment, net  15,153 15,342 15,931
Prepaid expenses 2,857 3,349 4,548
Intangible assets 1,162 1,259 1,560
Cash surrender value of life insurance 17,569 17,397 16,861
Deferred tax asset 8,469 8,992 5,955
Income tax receivable 3,104 3,158 1,640
Other assets 4,211 4,371 5,447
Total assets $649,135 $655,934 $745,837
       
Liabilities and shareholders' equity:      
Deposits:      
 Noninterest bearing $108,844 $103,080 $101,462
 Interest bearing 378,171 392,102 477,034
 Total deposits 487,015 495,182 578,496
FHLB advances 95,400 95,400 95,400
Junior subordinated debentures 10,310 10,310 10,310
Other liabilities 7,535 7,638 6,574
Total liabilities $600,260 $608,530 $690,780
       
Shareholders' equity:      
  $10,721 $10,721 $10,721
Common stock: $1 par value; 20 million shares authorized      
Nonvested restricted stock (84) (116) (293)
Capital surplus 64,161 64,679 65,906
Accumulated other comprehensive income (loss) (165) (460) 444
Retained earnings (deficit) (16,168) (17,189) (10,105)
Treasury stock, at cost (9,590) (10,231) (11,616)
Total shareholders' equity 48,875 47,404 55,057
Total liabilities and shareholders' equity $649,135 $655,934 $745,837
       
       
       
Income Statement Data Three Months Ended Three Months Ended Three Months Ended
(Dollars in thousands) March 31 December 31 March 31
  2011 2010 2010
  (Unaudited) (Unaudited) (Unaudited)
Interest income:      
Interest and fees on loans $6,405 $6,722 $7,500
Interest on investment securities 520 458 736
Interest on federal funds sold and interest-bearing deposits  16 38 22
 Total interest income 6,941 7,218 8,258
       
Interest expense:      
Interest on deposits 1,002 1,171 1,930
Interest on borrowings 1,012 1,027 1,002
 Total interest expense 2,014 2,198 2,932
       
Net interest income 4,927 5,020 5,326
Provision for loan losses 600 12,000 1,600
Net interest income (loss) after provision  4,327 (6,980) 3,726
Non-interest income:      
Service charges on deposit accounts 375 408 482
Gain on sale of loans held for sale 427 648 298
Fees from brokerage services 76 116 64
Income from fiduciary activities 530 508 472
Gain on sale of securities held-for-sale 224 6 683
Other operating income 484 474 1,348
 Total non-interest income 2,116 2,160 3,347
Non-interest expense:      
Salaries and employee benefits 2,572 2,650 2,439
Net occupancy expense 335 302 322
Amortization of intangible assets 97 101 103
Furniture and equipment expense 168 174 203
FDIC banking assessments 479 454 346
Net cost of operation of other real estate owned 159 884 40
Other operating expenses 1,187 1,343 1,334
 Total noninterest expense 4,997 5,908 4,787
Income (loss) before taxes 1,446 (10,728) 2,286
Income tax expense (benefit) 424 (3,768) 686
Net income (loss) $1,022 $(6,960) $1,600
           
       
Loan Composition: March 31, 2011 December 31, 2010 March 31, 2010
(Dollars in thousands) Balance Percent Balance Percent Balance Percent
             
Commercial and agricultural $37,428 8.05% $39,720 8.28% $38,487 7.01%
Real estate – construction 90,245 19.41% 99,076 20.67% 128,110 23.33%
Real estate – mortgage and commercial 277,512 59.68% 279,560 58.32% 312,246 56.88%
Home equity 40,764 8.77% 42,167 8.79% 46,548 8.48%
Consumer – Installment 17,855 3.84% 17,636 3.68% 22,344 4.07%
Other 1,174 0.25% 1,234 0.26% 1,275 0.23%
 Total $464,978 100.00% $479,393 100.00% $549,010 100.00%
             
Deposits: March 31, 2011 December 31, 2010 March 31, 2010
(Dollars in thousands) Balance Percent Balance Percent Balance Percent
             
Noninterest bearing demand  $108,844 22.35% $103,080 20.82% $101,462 17.54%
Interest bearing demand 64,319 13.21% 63,024 12.73% 64,367 11.13%
Money market and savings  173,464 35.62% 175,890 35.52% 175,471 30.33%
Brokered deposits 7,849 1.61% 7,849 1.58% 25,880 4.47%
Certificates of deposit 132,539 27.21% 145,339 29.35% 211,316 36.53%
 Total $487,015 100.00% $495,182 100.00% $578,496 100.00%
             
       
Wealth Management Group  March 31, 2011 December 31, 2010 March 31, 2010
Fiduciary and Related Services: 

(Dollars in thousands, except number of accounts)
     
       
Market value of accounts $692,969 $658,502 $540,791
Market value of discretionary accounts $228,271 $219,628 $201,320
Market value of non-discretionary accounts $464,698 $438,874 $339,471
Total number of accounts 1,538 1,473 1,505
       
       
Yield/Rate Analysis QTD Three Months Ended
  March 31, 2011
  Average   Yield/
(Dollars in thousands) Balance Interest Rate
ASSETS      
Loans(1)(3) $475,989 $6,411 5.46%
Securities, taxable(2) 62,630 365 2.36%
Securities, nontaxable(2)(3) 10,407 157 6.12%
Nonmarketable Equity Securities 9,495 41 1.75%
Fed funds sold and other (incl. FHLB) 31,708 16 0.20%
 Total earning assets 590,229 $6,990 4.80%
Non-earning assets 60,152    
 Total assets $650,381    
       
LIABILITIES AND       
STOCKHOLDERS' EQUITY      
Transaction accounts $192,505 $396 0.83%
Regular savings accounts 42,814 81 0.77%
Certificates of deposit  146,291 525 1.46%
FHLB Advances 95,400 817 3.47%
Junior subordinate debentures 10,310 195 7.67%
 Total interest-bearing liabilities 487,320 $2,014 1.67%
Non-interest bearing liabilities 114,512    
Stockholders' equity 48,549    
 Total liabilities & equity $650,381    
       
Net interest income/      
 interest rate spread   $4,976 3.13%
       
Net yield on earning assets     3.42%
       
       
Yield/Rate Analysis QTD Three Months Ended
  December 31, 2010
  Average   Yield/
(Dollars in thousands) Balance Interest Rate
       
ASSETS      
       
Loans(1)(3) $497,550 $6,729 5.37%
Securities, taxable(2) 56,175 336 2.37%
Securities, nontaxable(2)(3) 10,918 122 4.43%
Nonmarketable Equity Securities 9,772 33 1.34%
Fed funds sold and other (incl. FHLB) 40,864 39 0.38%
 Total earning assets $615,279 $7,259 4.68%
Non-earning assets 62,055    
 Total assets $677,334    
       
LIABILITIES AND       
STOCKHOLDERS' EQUITY      
       
Transaction accounts $204,400 $397 0.77%
Regular savings accounts 42,942 100 0.92%
Certificates of deposit  160,771 674 1.66%
FHLB Advances 95,400 833 3.46%
Junior subordinate debt 10,310 194 7.47%
 Total interest-bearing liabilities $513,823 $2,198 1.70%
Non-interest bearing liabilities 98,195    
Stockholders' equity 55,316    
 Total liabilities & equity $667,334    
       
Net interest income/      
 interest rate spread   $5,061 2.98%
       
Net yield on earning assets     3.26%
       
       
   
Yield/Rate Analysis QTD
  Three Months Ended

March 31, 2010
  Average   Yield/
(Dollars in thousands) Balance Interest Rate
ASSETS      
Loans(1)(3) $560,249 $7,506 5.43%
Securities, taxable(2) 54,697 536 3.97%
Securities, nontaxable(2)(3) 15,827 233 5.97%
Nonmarketable Equity Securities 10,267 31 1.22%
Fed funds sold and other (incl. FHLB) 43,968 22 0.20%
 Total earning assets 685,008 $8,328 4.93%
Non-earning assets 64,760    
 Total assets $749,768    
       
LIABILITIES AND       
STOCKHOLDERS' EQUITY      
Transaction accounts $190,446 $552 1.18%
Regular savings accounts 43,175 138 1.30%
Certificates of deposit  237,570 1,240 2.12%
FHLB Advances 95,400 823 3.50%
Junior subordinate debentures 10,310 179 7.04%
 Total interest-bearing liabilities 576,901 $2,932 2.06%
Non-interest bearing liabilities 118,471    
Stockholders' equity 54,396    
 Total liabilities & equity $749,768    
       
Net interest income/      
 interest rate spread   $5,396 2.87%
       
Net yield on earning assets     3.19%
       
(1)  The effect of loans in nonaccrual status and fees collected is not significant to the computations.
(2)  Average investment securities exclude the valuation allowance on securities available-for-sale.
(3)  Fully tax-equivalent basis at 38% tax rate for nontaxable securities and loans.
CONTACT: R. Wesley Brewer, Executive Vice President/CFO
         864-941-8290 or email: wbrewer@capitalbanksc.com
         Lee Lee M. Lee, Controller/VP of Investor Relations
         864-941-8242 or email: llee@capitalbanksc.com
         www.comcapcorp.com

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