Thursday, October 17, 2013

Competition making commercial loans more unattractive

The competition for commercial loans is getting a little too rich for Capital Bank's blood.

The company founded by former Bank of America executives to buy up troubled banks reported profits of $11.4 million in the third quarter, up 29 percent from the same period a year ago, Capital Bank Financial Corp. reported Thursday.

But the loan portfolio decreased in the quarter. CEO Gene Taylor attributed the decline to red-hot competition for good loans. Other banks, he said, have been offering loan terms that Capital Bank just doesn't believe it can profitably beat.

"We are seeing intense competition involving long-term fixed rates and unattractive credit terms for commercial and commercial real estate loans that we believe would be imprudent for us to match," Taylor said in a statement accompanying the bank's earnings release. He said the bank is investing more in its sales staff to try to get the loan portfolio growing.

Capital Bank is headquartered in Coral Gables, Fla., but has corporate offices in Charlotte, and branches in North Carolina, South Carolina, Tennessee, Virginia and Florida.

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