Capital Bank gets set for housing market to revive

Capital Bank is adding 15 mortgage officers -- more than doubling its current staff -- in anticipation of a resurgence in the housing market.

The Raleigh-based bank, which has 32 branches statewide, is also setting aside more than $20 million for mortgages for high-end homes.

The loans will be available for homes costing more than $600,000 that were constructed by homebuilders and developers that are Capital Bank customers. CEO Grant Yarber said rates will be 2 percentage points below a standard 30-year super jumbo mortgage for borrowers who qualify.

That program could help builders and developers who began building high-end speculative houses -- houses that didn't have a buyer lined up -- before the residential real estate market stumbled.

"We believe, in 2009, there are going to be some great bargains on interest rates for homebuyers," Yarber said. "We believe that 30-year rates will be in the 4.5 percent to 5 percent range for conventional mortgages. We believe that will spur a lot of people to purchase a new home."

Yarber said that Capital couldn't have afforded to hire the new mortgage officers, or set aside the loan money for high-end homes, without the $41 million it received shortly before Christmas from the U.S. Treasury Department's Capital Purchase Program. That program is part of the federal government's efforts to stabilize the banking system.

"One of the main things this [program] is supposed to be doing is helping the housing market rebound," he said.

The program has been criticized for failing to get banks across the country to lend more.

Most of the new mortgage officers the bank is hiring will be based in branches in the Triangle and Fayetteville, Yarber said. Today Capital has about a dozen mortgage officers.

On Thursday, Capital also broke ground for a new branch in Holly Springs that it expects to open this summer. It is also opening new branches in Wake Forest and Cary later this year, and last month it completed its acquisition of four Omni National Bank branches in Fayetteville.

"This is a recession, but this is a time to build," Yarber said. "We are doing pretty well and still believe very strongly in the Triangle, Fayetteville and North Carolina. What a shame it would be to pull back."

Capital Bank posted a $2 million profit in the third quarter, 27 percent less than a year ago.