Capital Crossing Bank Announces Annual and Fourth Quarter Results

Capital Crossing Bank (NASDAQ:CAPX) (the "Bank")
reported consolidated net income of $16.4 million, or $2.41 per
diluted share, for the year ended December 31, 2005, compared to
consolidated net income of $17.8 million, or $2.31 per diluted share,
for the year ended December 31, 2004.
   The Bank also reported consolidated net income of $4.1 million, or
$0.63 per diluted share, for the three months ended December 31, 2005,
compared to consolidated net income of $3.9 million, or $0.53 per
diluted share, for the same period in 2004. Total transactional income
for the three months ended December 31, 2005 amounted to $11.2
million, compared to the three months ended December 31, 2004 when the
Bank recognized $10.7 million of transactional income.
   Nicholas W. Lazares, the Bank's Chairman and Co-Chief Executive
Officer, stated, "We are pleased to report another strong year at
Capital Crossing Bank." Mr. Lazares further stated, "A significant
portion of the Bank's revenue arises from the recognition of
"transactional" income. In 2005, the Bank recognized $38.7 million of
transactional income, including $27.2 million of accelerated interest
income associated with loan and lease payoffs, $10.5 million in net
gain on sales of other real estate owned and assets in possession and
$939,000 in net gain on sales of loans. By contrast, in 2004 the Bank
recognized a total of $35.0 million of transactional income. Since the
level of transactional income is unpredictable from quarter to quarter
and year to year, the Bank's earnings may fluctuate significantly in
the future."
   Mr. Lazares also stated that, "We continue to focus on our
business of acquiring and managing loans. As we've previously
disclosed, the volume of our loan acquisitions can be unpredictable
from quarter-to-quarter and from year-to-year. During the fourth
quarter of 2005, we purchased loans with outstanding principal
balances of $121.2 million for a purchase price of $96.0 million,
compared to the same period in 2004 when we purchased loans with
outstanding principal balances of $90.8 million for a purchase price
of $79.9 million. For the year ended December 31, 2005, we purchased
loans with outstanding principal balances of $252.5 million for a
purchase price of $207.9 million, compared to 2004 when we purchased
loans with outstanding principal balances of $294.8 million for a
purchase price of $263.4 million. Included in our loan acquisitions
for 2004, were $114.5 million of high quality residential loans that
were acquired for a purchase price of $113.0 million. In 2005, we
purchased $6.5 million of such loans at a purchase price of $6.5
million. Although other residential loan portfolios were available
during 2005, management elected not to bid on or purchase such loans
at the offered pricing levels. "
   Richard Wayne, the Bank's President and Co-Chief Executive
Officer, reiterated that, "During the course of our review of
available loan portfolios, we will, in some cases, decline to bid on a
portfolio after analyzing the results of our due diligence review, or,
in other instances, be outbid by other purchasers. We simply cannot
predict how often we will successfully acquire a loan portfolio."
   Mr. Wayne further stated, "Our total non-performing assets
increased $2.8 million from $39.7 million at December 31, 2004 to
$42.5 million at December 31, 2005. While a substantial majority of
the loan and leases we have acquired in recent years have been
performing, we have also acquired appropriately priced non-performing
loans and leases. At December 31, 2005, we held loans and leases with
net investment balances of $14.1 million which were acquired as
non-performing, compared to $21.2 million at December 31, 2004.
Additionally, the balance of other real estate owned increased from
$7.6 million at December 31, 2004 to $14.0 million at December 31,
2005. The primary source of other real estate owned is purchased loans
that are or become non-performing. In the past, our pricing strategy
and the level of discount we obtain on such loans and leases has
enabled us to, over time, realize significant levels of transactional
income from these assets"
   During 2005, the Bank's leasing subsidiary, Dolphin Capital Corp.,
originated leases with an aggregate investment balance of $62.2
million, compared to 2004 when it originated or acquired leases with
an aggregate investment balance of $57.2 million. Dolphin Capital
Corp.'s net income was $1.8 million for the year ended 2005 compared
to $2.6 million in 2004.
   The Bank continued to repurchase shares of its common stock under
its common stock repurchase program during the fourth quarter of 2005.
On November 28, 2005, the Bank announced that it had increased the
amount of the repurchase program by $5.0 million. As of December 31,
2005, the Bank had repurchased 6,954,683 shares under its current
repurchase program and previous repurchase programs at an average
purchase price of $12.94 per share, and had an additional $7.0 million
to invest under its current repurchase program. The Bank initiated its
first repurchase program in August 2000.
   Lastly, the Bank's Shareholder Rights Agreement expires in 2006.
The Bank's Board of Directors has determined not to renew the
agreement upon its expiration.
   Investors and interested parties will have the opportunity to
listen to management's discussion of the Bank's quarterly and annual
results in a conference call to be held on Wednesday, January 25th at
11:00 a.m., Eastern Time. The conference call will be broadcast over
the investor relations page of the Bank's website at
www.capitalcrossing.com. For those who cannot listen to the live
broadcast, an audio replay of the call will be available on the
website or via telephone at 888-203-1112, access code #3409329. A
replay of the call will be available beginning at approximately 3:00
p.m. on January 25, 2006 through midnight on February 1, 2006.
   This press release contains a number of forward-looking statements
concerning the Bank's current expectations as to future growth and its
results of operations. Any statements that are not statements of
historical fact (including statements containing the words "believes,"
"plans," "anticipates," "expects," "estimates," "intends," "may,"
"projects," "will," "would," and similar expressions) should also be
considered to be forward-looking statements. There are a number of
important factors that could cause actual results or events to differ
materially from those indicated by such forward-looking statements,
including: the Bank's ability to successfully acquire loans at the
same volume and the same yields as it has historically, changes in
interest rates that adversely affect its business, the level of
transactional income realized by the Bank as a result of loan and
lease payoffs and the sale of real estate and loans, the Bank's
ability to successfully diversify its asset base, the level of the
Bank's non-performing assets, the Bank's ability to successfully
conduct its leasing business, general economic conditions in the
Bank's markets, as well as those other factors detailed under the
caption "Certain Factors That May Affect Future Results" in the Bank's
Quarterly Report on Form 10-Q for the period ended September 30, 2005,
which important factors are incorporated herein by this reference. The
Bank disclaims any intention or obligation to update any
forward-looking statements as a result of developments occurring after
the date of this press release.
   Capital Crossing Bank is a Massachusetts-chartered, FDIC-insured
trust company with $1.1 billion in assets as of December 31, 2005. The
Bank operates as a commercial bank, providing financial products and
services to customers through its executive and main offices in
Boston, its website at www.capitalcrossing.com, and through its
leasing subsidiary Dolphin Capital Corp., located in Moberly,
Missouri. The Bank is a value oriented investor in whole loans and
loan portfolios generally secured by commercial, multi-family and
one-to-four family residential real estate and other business assets.

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                Capital Crossing Bank and Subsidiaries
                   Consolidated Financial Highlights
                              (Unaudited)
                                                  December 31,
                                            -------------------------
                                                  2005         2004
                                            ------------ ------------
                                             (dollars in thousands,
                                              except per share data)

Total assets                                $1,106,158   $1,082,224

Loans and leases:                            1,004,120    1,005,665
     Non-accretable discount                   (53,407)     (47,042)
     Accretable discount                       (84,894)     (80,399)
     Allowance for loan and lease losses       (15,585)     (21,037)
     Net deferred loan and lease income        (18,396)     (16,326)
                                            -----------  -----------

          Loans and leases, net                831,838      840,861
                                            -----------  -----------

Short-term investments                         120,807       60,353

Securities available for sale                   84,645      115,417

Deposits                                       723,388      727,874

Borrowed funds                                 218,849      176,079

REIT preferred stock                            64,758       64,761

Stockholders' equity                            76,499       91,355

Non-performing assets:
     Other real estate owned, net               14,003        7,567
     Other assets in possession, net               506        1,163
     Non-performing loans and leases:
          Loans and leases acquired as non-
           performing                           14,078       21,213
          Loans and leases that became non-
           performing subsequent to
           acquisition                          13,880        9,761
                                            -----------  -----------

               Total non-performing assets,
                net                             42,467       39,704
                                            -----------  -----------

Total non-performing assets, net as a
 percent to total assets                          3.84 %       3.67 %
Allowance for loan and lease losses as a
 percent of loans and leases, net of
     discount and deferred income                 1.84         2.44
Allowance for loan and lease losses as a
 percent of net non-performing
     loans and leases                            55.74        67.92


Book value per common share                     $14.52       $14.96
Tangible book value per common share             13.69        14.24

Shares outstanding, net                      5,269,184    6,108,114



                Capital Crossing Bank and Subsidiaries
       Consolidated Operating Results and Related Financial Data
                              (Unaudited)

                                  Three Months Ended    Years Ended
                                     December 31,       December 31,
                                   ----------------- -----------------
                                      2005     2004     2005     2004
                                   -------- -------- -------- --------
                                 (in thousands, except per share data)

Interest income - regularly
 scheduled                         $19,894  $17,871  $75,019  $69,333
Interest income - accelerated        8,215    9,791   27,246   30,603
                                   -------- -------- -------- --------

     Total interest income          28,109   27,662  102,265   99,936
Interest expense                   (10,817)  (8,373) (37,482) (31,062)
                                   -------- -------- -------- --------

Net interest income                 17,292   19,289   64,783   68,874
Credit (provision) for loan and
 lease losses                          432      694    2,670    2,797
                                   -------- -------- -------- --------

Net interest income, after credit
 (provision) for loan and lease
 losses                             17,724   19,983   67,453   71,671

Gain on sales of loans, net            939      926      939    3,098
Other income                           396      553    1,613    2,051

Operating expenses:
     Other real estate owned and
      assets in possession income
      (expense), net                 1,750     (467)   9,574      271
     Other operating expenses      (11,372) (12,273) (42,624) (40,302)
                                   -------- -------- -------- --------

          Total operating expenses  (9,622) (12,740) (33,050) (40,031)
                                   -------- -------- -------- --------

Income before income taxes,
 minority interest and dividends on
 REIT
     preferred stock                 9,437    8,722   36,955   36,789
Provision for income taxes          (4,420)  (3,860) (16,639) (15,768)
Minority interest, net of taxes        (33)     (26)    (187)    (133)
Dividends on REIT preferred stock,
 net of taxes                         (927)    (926)  (3,708)  (3,052)
                                   -------- -------- -------- --------

     Net income                     $4,057   $3,910  $16,421  $17,836
                                   ======== ======== ======== ========


Weighted average shares
 outstanding:
     Basic                           5,289    6,225    5,641    6,530
     Diluted                         6,444    7,398    6,810    7,721

Earnings per share:
     Basic                           $0.77    $0.63    $2.91    $2.73
     Diluted                          0.63     0.53     2.41     2.31

Financial ratios (annualized):
     Return on average assets         1.44%    1.48%    1.56%    1.72%
     Return on average
      stockholders' equity           21.50%   16.84%   19.88%   18.91%


Transactional income:
    Interest and fee income on loan
     and lease pay-offs
          Non-accretable discount   $2,236   $5,744   $9,972  $15,005
          Accretable discount        3,202    3,389   10,532   11,750
          Other interest income      2,777      658    6,742    3,848
                                   -------- -------- -------- --------

               Total interest and
                fee income on loan
                and lease pay-offs   8,215    9,791   27,246   30,603
          Gain on sale of loans,
           net                         939      926      939    3,098
          Gain on sale of other
           real estate owned and
           assets in possesion, net  2,057       (6)  10,525    1,290
                                   -------- -------- -------- --------

                    Total
                     transactional
                     income        $11,211  $10,711  $38,710  $34,991
                                   ======== ======== ======== ========


                Capital Crossing Bank and Subsidiaries
           Interest Rate and Loan and Lease Volume Analysis
                              (Unaudited)

                             Three Months Ended       Years Ended
                                December 31,         December 31,
                             ------------------- ---------------------
                                 2005     2004       2005       2004
                             ------------------- ---------- ----------
                                      (dollars in thousands)
Weighted average yield/rate
 (annualized):
     Short-term investments      4.03 %   2.04 %     3.41 %     1.36 %
     Securities available for
      sale                       4.73     4.55       4.69       3.80
     Loan and lease
      portfolio, net            12.46    12.95      11.63      12.21

          Total interest-
           earning assets       10.71 %  11.11 %    10.30 %    10.09 %

     Interest bearing
      liabilities                4.52 %   3.86 %     4.25 %     3.58 %

Interest rate spread             6.19 %   7.25 %     6.05 %     6.51 %

Net interest margin              6.59 %   7.75 %     6.53 %     6.95 %


Loan and lease volume:

     Loan originations         $9,383   $1,600     $9,891     $2,600
     Loan acquisitions
          Loan balances       121,184   90,771    252,532    294,793
          (Discount) premium,
           net                (25,155) (10,857)   (44,632)   (31,354)
                             --------- --------  ---------  ---------

               Loan
                acquisitions,
                net            96,029   79,914    207,900    263,439
                             --------- --------  ---------  ---------

                    Total
                     loan
                     volume   105,412   81,514    217,791    266,039
                             --------- --------  ---------  ---------

     Lease originations        16,587   14,207     62,187     48,909
     Lease acquisitions, net        -    1,327          -      8,287
                             --------- --------  ---------  ---------

          Total lease volume   16,587   15,534     62,187     57,196
                             --------- --------  ---------  ---------

                    Total
                     loan and
                     lease
                     volume,
                     net     $121,999  $97,048   $279,978   $323,235
                             ========= ========  =========  =========
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