Capital Crossing Bank (NASDAQ:CAPX)
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From Oct 2019 to Oct 2024
Capital Crossing Bank (NASDAQ:CAPX) (the "Bank")
reported consolidated net income of $4.4 million, or $0.70 per diluted
share, for the second quarter of 2006, compared to consolidated net
income of $4.3 million, or $0.62 per diluted share, for the same
period in 2005.
The Bank also reported consolidated net income of $7.4 million, or
$1.16 per diluted share, for the six months ended June 30, 2006,
compared to consolidated net income of $8.9 million, or $1.26 per
diluted share, for the same period in 2005.
Nicholas W. Lazares, the Bank's Chairman and Co-Chief Executive
Officer, stated, "We are pleased to report another solid 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 2006, the Bank
recognized $14.4 million of transactional income, including $3.7
million of accelerated interest income associated with loan and lease
payoffs, $8.2 million in net gains on sales of loans and $2.5 million
in net gains on sales of other real estate owned and assets in
possession. By contrast, 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 assets in possession. Total transactional income for the
six months ended June 30, 2006 and 2005 amounted to $22.2 million and
$19.8 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 2006, we purchased loans with outstanding
principal balances of $92.9 million for a purchase price of $75.4
million, compared to the same period in 2005, when we purchased loans
with outstanding principal balances of $48.7 million for a purchase
price of $41.5 million. In the six months ended June 30, 2006, we
purchased loans with outstanding principal balances of $127.7 million
for a purchase price of $104.8 million, compared to the same period in
2005, when we purchased loans with outstanding principal balances of
$99.6 million for a purchase price of $85.9 million." 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
increased $8.8 million from $42.5 million at December 31, 2005 to
$51.3 million at June 30, 2006. 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, 2006, we held loans and leases with net investment
balances of $11.7 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."
A net provision for loan and lease losses of $1.1 million was
recorded in the second quarter of 2006 compared to a net credit for
loan and lease losses of $510,000 for the same period in 2005. In the
second quarter of 2006, the Bank recorded an impairment provision of
$793,000 and a provision for new loans acquired of $271,000. Similar
provisions were not recorded in the second quarter of 2005. During the
quarters ended June 30, 2006 and 2005, loan payoffs generated net
credits for loan losses of $367,000 and $785,000, respectively, the
purpose of which was to reverse unused reserves related to the paid
off loans. A net provision for loan and lease losses of $573,000 was
recorded for the six months ended June 30, 2006 compared to a net
credit for loan and lease losses of $1.6 million for the same period
in 2005.
During the second quarter of 2006, the Bank's leasing subsidiary,
Dolphin Capital Corp., originated leases with an aggregate investment
balance of $20.0 million, compared to the same period in 2005 when it
originated or acquired leases with an aggregate investment balance of
$15.5 million. During the six months ended June 30, 2006, Dolphin
Capital originated leases with an aggregate investment balance of
$39.1 million compared to the same period in 2005 when it originated
or acquired leases with an aggregate investment balance of $30.1
million. The increase is partially attributable to the initiation of a
more aggressive marketing campaign.
The Bank continued to repurchase shares of its common stock under
its common stock repurchase program during the second quarter of 2006.
On July 14, 2006, the Bank announced that it had increased the amount
of the repurchase program by $10.0 million and extended the repurchase
program until July 11, 2007. As of July 25, 2006 the Bank had
repurchased 7,168,289 shares under its current repurchase program and
previous repurchase programs at an average purchase price of $13.36
per share, and had an additional $11.2 million to invest under its
current repurchase program. The Bank initiated its first repurchase
program in August 2000.
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 Thursday, July 27th
at 1:00 p.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 #3740536. A
replay of the call will be available beginning at approximately 3:00
p.m. on July 27, 2006 through midnight on August 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 "Item
1A. Risk Factors" in Part II of the Bank's Quarterly Report on Form
10-Q for the period ended March 31, 2006, 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 June 30, 2006. 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,
2006 2005
------------ -------------
(dollars in thousands, except
per share data)
Total assets $ 1,055,947 $ 1,106,158
Loans and leases: 1,018,238 1,004,120
Non-accretable discount (59,572) (53,407)
Accretable discount (79,896) (84,894)
Allowance for loan and lease losses (13,586) (15,585)
Net deferred loan and lease income (20,842) (18,396)
------------ ------------
Loans and leases, net 844,342 831,838
------------ ------------
Short-term investments 44,939 120,807
Securities available for sale 97,156 84,645
Deposits 736,929 723,388
Borrowed funds 156,755 218,849
REIT preferred stock 64,758 64,758
Stockholders' equity 79,279 76,499
Non-performing assets:
Other real estate owned, net 15,477 14,003
Other assets in possession, net 407 506
Non-performing loans and leases:
Loans and leases acquired as
non-performing 11,719 14,078
Loans and leases that became
non-performing subsequent to
acquisition 23,690 13,880
------------ ------------
Total non-performing
assets, net 51,293 42,467
------------ ------------
Total non-performing assets, net as a
percent to total assets 4.86% 3.84%
Allowance for loan and lease losses as a
percent of loans and leases, net of
discount and deferred income 1.58 1.84
Allowance for loan and lease losses as a
percent of net non-performing
loans and leases 38.37 55.74
Book value per common share $ 15.47 $ 14.52
Tangible book value per common share 14.61 13.69
Shares outstanding, net 5,125,541 5,269,184
Capital Crossing Bank and Subsidiaries
Consolidated Operating Results and Related Financial Data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------- -----------------
2006 2005 2006 2005
-------- -------- -------- --------
(in thousands, except
per share data)
Interest income - regularly
scheduled $18,606 $18,418 $37,651 $36,477
Interest income - accelerated 3,663 5,796 8,980 12,110
-------- -------- -------- --------
Total interest income 22,269 24,214 46,631 48,587
Interest expense (10,445) (8,910) (20,198) (17,110)
-------- -------- -------- --------
Net interest income 11,824 15,304 26,433 31,477
(Provision) credit for loan and
lease losses (1,122) 510 (573) 1,550
-------- -------- -------- --------
Net interest income, after
(provision) credit for loan and
lease losses 10,702 15,814 25,860 33,027
Gain on sales of loans, net 8,237 - 9,566 -
Other income 420 421 880 823
Operating expenses:
Other real estate owned and
assets in possession
income, net 1,869 3,929 2,671 7,343
Other operating expenses (11,273) (10,598) (21,894) (21,621)
-------- -------- -------- --------
Total operating expenses (9,404) (6,669) (19,223) (14,278)
-------- -------- -------- --------
Income before income taxes, minority
interest and dividends on REIT
preferred stock 9,955 9,566 17,083 19,572
Provision for income taxes (4,527) (4,331) (7,712) (8,722)
Minority interest, net of taxes (91) (23) (146) (55)
Dividends on REIT preferred stock,
net of taxes (927) (927) (1,854) (1,854)
-------- -------- -------- --------
Net income $ 4,410 $ 4,285 $ 7,371 $ 8,941
======== ======== ======== ========
Weighted average shares
outstanding:
Basic 5,166 5,803 5,211 5,913
Diluted 6,267 6,964 6,335 7,085
Earnings per share:
Basic $ 0.85 $ 0.74 $ 1.41 $ 1.51
Diluted 0.70 0.62 1.16 1.26
Financial ratios (annualized):
Return on average assets 1.73% 1.68% 1.45% 1.74%
Return on average
stockholders' equity 22.85% 19.84% 19.18% 20.44%
Transactional income:
Interest and fee income on
loan and lease pay-offs
Non-accretable
discount $ 1,275 $ 2,331 $ 1,959 $ 5,948
Accretable discount 1,762 2,012 4,688 4,216
Other interest income 626 1,453 2,333 1,946
-------- -------- -------- --------
Total interest and
fee income on loan
and lease pay-offs 3,663 5,796 8,980 12,110
Gain on sale of loans,
net 8,237 - 9,566 -
Gain on sale of other
real estate owned and
assets in possession,
net 2,454 4,260 3,656 7,733
-------- -------- -------- --------
Total
transactional
income $14,354 $10,056 $22,202 $19,843
======== ======== ======== ========
Capital Crossing Bank and Subsidiaries
Interest Rate and Loan and Lease Volume Analysis
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
(dollars in thousands)
Weighted average yield/rate
(annualized):
Short-term investments 4.86% 2.91% 4.58% 2.63%
Securities available for
sale 4.74 4.75 4.73 4.72
Loan and lease portfolio,
net 10.29 11.05 10.88 11.16
Total interest-
earning assets 9.41% 10.04% 9.88% 10.06%
Interest bearing
liabilities 4.89% 4.19% 4.76% 4.02%
Interest rate spread 4.52% 5.85% 5.12% 6.04%
Net interest margin 5.00% 6.34% 5.60% 6.52%
Loan and lease volume:
Loan originations $ 664 $ - $ 2,839 $ 508
Loan acquisitions
Loan balances 92,865 48,717 127,661 99,625
(Discount) premium,
net (17,432) (7,196) (22,862) (13,681)
--------- --------- --------- ---------
Loan
acquisitions,
net 75,433 41,521 104,799 85,944
--------- --------- --------- ---------
Total loan
volume 76,097 41,521 107,638 86,452
--------- --------- --------- ---------
Lease originations 19,988 15,544 39,144 30,070
Lease acquisitions, net - - - -
--------- --------- --------- ---------
Total lease volume 19,988 15,544 39,144 30,070
--------- --------- --------- ---------
Total loan
and lease
volume,
net $ 96,085 $ 57,065 $146,782 $116,522
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