History

Capital Bank, headquartered in Raleigh, N.C., is a wholly owned subsidiary of Capital Bank Corporation (NASDAQ Global Select Market: CBKN). The bank began operation on June 20, 1997 after one of the most successful stock offering ever for a new bank in North Carolina. Using a foundation of a strong management team and an active board of directors, Capital Bank has experienced exceptional growth as a result of its Hometown Banking strategy. The bank has achieved continual earnings improvement, becoming profitable in just its second full year of operation.

The rapid growth that Capital Bank has experienced may be credited to internal loan and deposit production as well as external acquisitions. To date, Capital Bank has achieved five significant acquisitions:

• Most recently in December 2008, Capital Bank acquired the four Fayetteville area branches of Omni National Bank, the banking subsidiary of Omni Financial Services, Inc., a bank holding company headquartered in Atlanta, GA.
• In January 2006, following the acquisition of 1st State Bancorp, Inc. by Capital Bank Corporation, Capital Bank completed a merger with 1st State Bank located in Burlington, N.C., and doubled its market in the Triad with approximately 22% of the deposits in Alamance County.
• In December 2002, Capital Bank completed a merger with High Street Banking Company located in Asheville, N.C. High Street Banking Company was a subsidiary of High Street Corporation, with approximately $161 million in assets with three branches in Asheville and Hickory, N.C.
• In March 2002, Capital Bank completed a merger with Community Savings Bank located in Burlington, N.C. Community Savings Bank was a subsidiary of First Community Financial Corporation, with assets of approximately $220 million and four branch offices located in Burlington and Graham, N.C.
• The first involved the purchase of Home Savings Bank of Siler City, which we completed in 1999.