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- 2012 - September - 24th -

Capital Bank Financial, with Jacksonville roots, goes public

by Mark Basch, Contributing Writer

A bank holding company with roots in Jacksonville went public last week, three years after it was formed with the intent of buying up Southeastern banks to form a regional franchise.

Capital Bank Financial Corp. sold 10 million shares at $18 in its initial public offering Wednesday, consisting of about 5.7 million new shares and 4.3 million shares sold by its existing investors.

Capital Bank Financial was formed in 2009, under the name North American Financial Holdings Inc., by a group of former Bank of America officers and other financial executives, some of whom lived in Jacksonville.

The company originally listed its headquarters as both Jacksonville and Charlotte, but its official home is now listed as Coral Cables in Securities and Exchange Commission filings. It currently does not indicate any presence in Jacksonville.

Capital Bank Financial has acquired six banks since it was formed and has a seventh acquisition pending. Including the pending deal, the company’s banks operated 165 branches in Tennessee, Florida, North Carolina, South Carolina and Virginia as of June 30, with total assets of $7.7 billion.

The company’s management is led by R. Eugene Taylor, former vice chairman of Bank of America and also a former head of Bank of America’s Florida operations.

Capital Bank Financial trades on the Nasdaq market under the ticker symbol “CBF.”

Capital Bank Financial had to settle for a lower IPO price than it had hoped. It said in SEC filings the previous week that it expected to sell its shares for $21 to $23 each, before pricing the shares at $18 Wednesday night.

However, that seems to be the trend for bank IPOs. Another bank led by a former Bank of America executive, Colorado-based National Bank Holdings Corp., priced its IPO at $19.25 Thursday morning after estimating its price range at $20 to $22.

Both companies rose on their first day of trading Thursday. Capital Bank Financial opened at $18.10 and reached as high as $18.57 before closing at $18.19

National Bank Holdings, which trades on the New York Stock Exchange under the ticker “NBHC,” opened at $20.25 and closed Thursday at $19.60

Both banks followed the trend set by Jacksonville-based EverBank Financial Corp.’s IPO in May. EverBank settled for an IPO price of $10 after indicating in SEC filings that it wanted to sell its shares at $12 to $14 each.

EverBank traded as high as $10.80 on its first day and it has been trading near the $12.50 level recently.

J. Alexander’s shareholders accept Fidelity bid

The three-month saga of Fidelity National Financial Inc.’s bid to buy J. Alexander’s Corp. is finally over.

After Fidelity’s tender offer to J. Alexander’s stockholders expired Wednesday, the companies announced Thursday morning that 73.8 percent of J. Alexander’s shares were tendered to accept Fidelity’s $14.50-a-share bid. That gives Fidelity control of the restaurant chain.

Jacksonville-based Fidelity originally offered $12 a share in June and raised its bid to $13 in July but with other unidentified parties offering higher prices, Fidelity had to raise its offer again to $14.50 earlier this month.

J. Alexander’s said Tuesday that no other parties topped the $14.50 bid.

Fidelity, which is mainly a title insurance company, will fold J. Alexander’s into its 55 percent-owned restaurant subsidiary, American Blue Ribbon Holdings.

That subsidiary already owns the O’Charley’s, Ninety Nine Restaurant, Max & Erma’s, Village Inn, Bakers Square and Stoney River Legendary Steaks chains.

“J. Alexander’s has a strong reputation for providing great service and a high quality dining experience to its guests, and will enhance the growth of our upscale casual concepts at American Blue Ribbon Holdings,” Fidelity CEO George Scanlon said in a news release.

CSX drops on Norfolk Southern forecast

Jacksonville-based CSX Corp.’s stock dropped Thursday, along with other railroad companies, after rival Norfolk Southern Corp. sharply lowered its third-quarter earnings forecast.

Norfolk Southern said it expects earnings of $1.18 to $1.25 a share, well below the average forecast of $1.63 by analysts surveyed by Thomson Financial.

“Decreased coal and merchandise shipments, offset in part by growth in intermodal volumes, are together expected to reduce revenues by approximately $120 million compared with third quarter 2011,” Norfolk Southern said.

Analysts had already been expressing concerns about lower coal shipments affecting CSX’s earnings. That caused Dahlman Rose & Co. analyst Jason Seidl to downgrade CSX from “buy” to “hold” three weeks ago.

UBS analysts downgraded CSX and other railroads Tuesday from “buy” to “neutral.” A UBS spokesman said the firm’s report on the railroads was proprietary, so the reasons for the downgrade were not made public.

Sterne, Agee & Leach analysts lowered their earnings forecast for CSX after hosting a meeting with company officials and investors earlier this month, but they maintained their “buy” rating.

“Our net takeaway was that while the valuation remains attractive and the railroad is operating well, CSX will be challenged through the spring because of a larger southeastern U.S. exposure to utility coal stockpiles, overshadowing some fundamental improvements for the next two quarters,” the Sterne Agee analysts said in their report.

CSX’s stock fell $1.30 to $21.49 Thursday after the Norfolk Southern announcement. Norfolk Southern dropped $6.58 to $66.11

CSX will report its third-quarter earnings Oct. 16.

Politics impacting Northrop Grumman

St. Johns County’s largest corporate employer could be facing some tougher times if federal lawmakers can’t agree on a budget deficit reduction deal, according to one analyst.

UBS analyst David Strauss downgraded his rating on Northrop Grumman Corp. from “neutral” to “sell” because of mandatory defense spending budget cuts that will come if Washington politicians can’t reach agreement on the budget, a procedure known as sequestration.

“Northrop’s lack of diversification beyond the U.S. defense and security markets makes it most susceptible to U.S. defense budget cuts in general and under a potential sequestration scenario,” Strauss said in his report.

“Under sequestration, we see 9 percent downside to consensus EPS estimates for Northrop in 2013 and 20 percent-plus downside in 2014,” he said.

“We expect Northrop’s revenues to decline at a faster pace than the rest of large cap defense while we believe margins have the most downside as Northrop has seen the largest benefit from favorable contract adjustments, which we view as unsustainable,” Strauss said.

Northrop already may be feeling the impact. The Los Angeles Times reported last week that the company accepted buyouts from 590 aerospace employees in Southern California in anticipation of defense spending cuts.

Northrop employs 990 people at its aerospace plant in St. Augustine.

Dick’s Wings owner keeps making noise

American Restaurant Concepts Inc. was a generally quiet business during its first couple of years as a public company. But with a new major investor on board, the franchisor of the Dick’s Wings restaurant chain has been making a lot of noise lately.

After reporting a profit in the second quarter, the Jacksonville-based company last week announced it expects to do even better in the third quarter.

“We have continued right where we left off at the end of our second quarter, with strong growth in our revenue. Our third quarter revenue growth, coupled with our disciplined expense management, should result in record third quarter profits for us,” CEO Michael Rosenberger said in a news release.

American Restaurant Concepts also announced that it has reached an agreement to open a new Dick’s Wings restaurant in Nocatee in St. Johns County, which is expected to open before the end of the year.

There currently are 18 Dick’s Wings restaurants in operation.

ParkerVision closes stock sale

ParkerVision Inc. last week completed the sale of nearly 4.4 million shares of stock at $2.30 each in a private placement to undisclosed investors.

The Jacksonville-based company, which is developing wireless technology and has lost money in every year of its existence, raised about $9.3 million in new capital from the sale, after expenses.

With the new stock issued, ParkerVision now has about 82.8 million shares of common stock outstanding.

mbasch@baileypub.com

356-2466

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