Capital Crossing Bank (NASDAQ:CAPX)
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From Jul 2019 to Jul 2024
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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