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 $4.3 million, or $0.62 per diluted
share, for the second quarter of 2005, compared to consolidated net
income of $4.3 million, or $0.54 per diluted share, for the same
period in 2004.
The Bank also reported consolidated net income of $8.9 million, or
$1.26 per diluted share, for the six months ended June 30, 2005,
compared to consolidated net income of $9.5 million, or $1.20 per
diluted share, for the same period in 2004.
Nicholas W. Lazares, the Bank's Chairman and Co-Chief Executive
Officer, stated, "We are pleased to report another strong quarter at
Capital Crossing Bank." Mr. Lazares further stated, "A significant
portion of the Bank's revenue arises from the recognition of
"transactional" income. In the second quarter of 2005, the Bank
recognized $10.1 million of transactional income, including $5.8
million of accelerated interest income associated with loan and lease
payoffs and $4.3 million in net gains on sales of other real estate
owned and property in possession. By contrast, in the second quarter
of 2004, the Bank recognized approximately $8.7 million of
transactional income, including $6.9 million of accelerated interest
income associated with loan and lease payoffs, $960,000 in gains on
sales of loans and $845,000 in net gains on sales of other real estate
owned and property in possession. Total transactional income for the
six months ended June 30, 2005 and 2004 amounted to $19.8 million and
$17.0 million, respectively. Since the level of transactional income
is unpredictable from quarter to quarter, the Bank's earnings may
fluctuate significantly in the future."
Richard Wayne, the Bank's President and Co-Chief Executive
Officer, explained that, "The volume of our loan acquisitions varies
from quarter-to-quarter depending upon market conditions. For example,
in the second quarter of 2005, we purchased loans with outstanding
principal balances of $48.7 million for a purchase price of $41.5
million, compared to the same period in 2004, when we purchased loans
with outstanding principal balances of $164.5 million for a purchase
price of $148.6 million. In the six months ended June 30, 2005, we
purchased loans with outstanding principal balances of $99.6 million
for a purchase price of $85.9 million, compared to the same period in
2004, when we purchased loans with outstanding principal balances of
$183.4 million for a purchase price of $167.6 million." Included in
our loan acquisitions for the second quarter of 2004, were $89.8
million of high quality residential loans that were acquired for a
purchase price of $88.1 million. Although residential loan portfolios
were available for purchase in the second quarter of 2005, management
elected not to bid on or purchase such loans at the offered pricing
levels. Mr. Wayne continued, "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 bid on a loan portfolio."
Mr. Wayne further stated, "Our total non-performing assets
decreased $10.2 million from $39.7 million at December 31, 2004 to
$29.5 million at June 30, 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 June 30, 2005, we held loans and leases with net investment
balances of $9.9 million which were acquired as 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 the second quarter of 2005, the Bank's leasing subsidiary,
Dolphin Capital Corp., originated leases with an aggregate investment
balance of $15.5 million, compared to the same period in 2004 when it
originated or acquired leases with an aggregate investment balance of
$12.3 million. During the six months ended June 30, 2005, Dolphin
Capital originated leases with an aggregate investment balance of
$30.1 million compared to the same period in 2004 when it originated
or acquired leases with an aggregate investment balance of $23.5
million. The increase is partially attributable to the initiation of a
more aggressive marketing campaign. Dolphin Capital Corp.'s net income
was $1.3 million for the six months ended June 30, 2005, compared to
$1.2 million for the same period in 2004 and $425,000 for the second
quarter in 2005, compared to $484,000 for the same period in 2004.
The Bank continued to repurchase shares of its common stock under
its common stock repurchase program during the second quarter of 2005.
On June 27, 2005, the Bank announced that it had increased the amount
of the repurchase program by $15.0 million. As of June 30, 2005, the
Bank had repurchased 6,609,818 shares under its current repurchase
program and previous repurchase programs at an average purchase price
of $11.74 per share, and had an additional $14.4 million to invest
under its current repurchase program. The Bank initiated its first
repurchase program in August 2000.
On July 22, 2004, the Bank announced that it had declared a
2-for-1 stock split effected in the form of a dividend, which was
subsequently paid on August 9, 2004 to shareholders of record at the
close of business on August 2, 2004. The effect of the stock split was
that shareholders received one additional share of common stock for
every share owned on the record date. The retroactive effect of this
stock split has been applied to the number of shares and per share
information contained in this press release.
Investors and interested parties will have the opportunity to
listen to management's discussion of the Bank's quarterly and six
month results in a conference call to be held on Wednesday, July 20th
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 #7889843. A
replay of the call will be available beginning at approximately 2:00
p.m. on July 20, 2005 through midnight on July 26, 2005.
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 March 31, 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 $1.0 billion in assets as of June 30, 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)
June 30, December 31,
2005 2004
------------ ------------
(dollars in thousands,
except per share data)
Total assets $1,048,561 $1,082,224
Loans and leases: 997,375 1,005,665
Non-amortizing discount (43,462) (47,042)
Amortizing discount (80,472) (80,399)
Allowance for loan and lease losses (17,416) (21,037)
Net deferred loan and lease income (17,500) (16,326)
----------- -----------
Loans and leases, net 838,525 840,861
----------- -----------
Short-term investments 63,659 60,353
Securities available for sale 88,071 115,417
Deposits 713,379 727,874
Borrowed funds 171,623 176,079
REIT preferred stock 64,759 64,761
Stockholders' equity 81,742 91,355
Non-performing assets:
Other real estate owned, net 5,723 7,567
Other assets in possession, net 250 1,163
Non-performing loans and leases:
Loans and leases acquired as non-
performing 9,936 21,213
Loans and leases that became non-
performing subsequent to
acquisition 13,598 9,761
----------- -----------
Total non-performing assets, net 29,507 39,704
----------- -----------
Total non-performing assets, net as a
percent to total assets 2.81 % 3.67 %
Allowance for loan and lease losses as a
percent of loans and leases, net of
discount and deferred income 2.03 2.44
Allowance for loan and lease losses as a
percent of net non-performing
loans and leases 74.00 67.92
Book value per common share $14.65 $14.96
Tangible book value per common share 13.86 14.24
Shares outstanding, net 5,581,481 6,108,114
Capital Crossing Bank and Subsidiaries
Consolidated Operating Results and Related Financial Data
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
----------------- -----------------
2005 2004 2005 2004
-------- -------- -------- --------
(in thousands, except per share data)
Interest income - regularly
scheduled $18,418 $15,994 $36,477 $33,172
Interest income - accelerated 5,796 6,904 12,110 14,292
-------- -------- -------- --------
Total interest income 24,214 22,898 48,587 47,464
Interest expense (8,910) (7,521) (17,110) (14,687)
-------- -------- -------- --------
Net interest income 15,304 15,377 31,477 32,777
Credit (provision) for loan and
lease losses 510 732 1,550 2,040
-------- -------- -------- --------
Net interest income, after credit
(provision) for loan and lease
losses 15,814 16,109 33,027 34,817
Gain on sales of loans, net - 960 - 1,735
Other income 421 472 823 999
Operating expenses:
Other real estate owned and
assets in possession income,
net 3,929 533 7,343 380
Other operating expenses (10,598) (9,280) (21,621) (18,991)
-------- -------- -------- --------
Total operating expenses (6,669) (8,747) (14,278) (18,611)
-------- -------- -------- --------
Income before income taxes,
minority interest and dividends on
REIT preferred stock 9,566 8,794 19,572 18,940
Provision for income taxes (4,331) (3,804) (8,722) (8,200)
Minority interest, net of taxes (23) (11) (55) (88)
Dividends on REIT preferred stock,
net of taxes (927) (728) (1,854) (1,198)
-------- -------- -------- --------
Net income $4,285 $4,251 $8,941 $9,454
======== ======== ======== ========
Weighted average shares outstanding:
Basic 5,803 6,676 5,913 6,666
Diluted 6,964 7,867 7,085 7,882
Earnings per share:
Basic $0.74 $0.64 $1.51 $1.42
Diluted 0.62 0.54 1.26 1.20
Financial ratios (annualized):
Return on average assets 1.68% 1.75% 1.74% 1.94%
Return on average
stockholders' equity 19.84% 17.83% 20.44% 20.33%
Transactional income:
Interest and fee income on loan
and lease pay-offs
Non-amortizing discount $2,331 $2,834 $5,948 $5,887
Amortizing discount 2,012 2,974 4,216 6,569
Other interest income 1,453 1,096 1,946 1,836
-------- -------- -------- --------
Total interest and
fee income on loan
and lease pay-offs 5,796 6,904 12,110 14,292
Gain on sale of loans, net - 960 - 1,735
Gain on sale of other
real estate owned and
assets in possession, net 4,260 845 7,733 980
-------- -------- -------- --------
Total transactional income $10,056 $8,709 $19,843 $17,007
======== ======== ======== ========
Capital Crossing Bank and Subsidiaries
Interest Rate and Loan and Lease Volume Analysis
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------------
2005 2004 2005 2004
---------------------------------------
(dollars in thousands)
Weighted average yield/rate
(annualized):
Short-term investments 2.91 % 1.08 % 2.63 % 1.09 %
Securities available for
sale 4.75 3.79 4.72 3.46
Loan and lease portfolio,
net 11.05 12.11 11.16 12.36
Total interest-earning assets 10.04 % 9.87 % 10.06 % 10.13 %
Interest bearing liabilities 4.19 % 3.73 % 4.02 % 3.58 %
Interest rate spread 5.85 % 6.14 % 6.04 % 6.55 %
Net interest margin 6.34 % 6.63 % 6.52 % 7.00 %
Loan and lease volume:
Loan originations $- $1,000 $508 $1,000
Loan acquisitions
Loan balances 48,717 164,482 99,625 183,378
(Discount) premium, net (7,196) (15,858) (13,681) (15,781)
-------- --------- --------- ---------
Loan acquisitions, net 41,521 148,624 85,944 167,597
-------- --------- --------- ---------
Total loan volume 41,521 149,624 86,452 168,597
-------- --------- --------- ---------
Lease originations 15,544 11,229 30,070 22,440
Lease acquisitions, net - 1,023 - 1,023
-------- --------- --------- ---------
Total lease volume 15,544 12,252 30,070 23,463
-------- --------- --------- ---------
Total loan and
lease volume, net $57,065 $161,876 $116,522 $192,060
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