Capital Crossing Bank Announces Quarterly and Annual Earnings.Business Editors BOSTON--(BUSINESS WIRE)--Jan. 22, 2002 Capital Crossing Bank (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CAPX CAPX Capital Expenditure(s) cAPX cytosolic ascorbate peroxidase CAPX Capital Expense(s) CAPX Customer Accessible Parts eXpress (Grove Cranes) ) (the "Bank") announced that for the quarter and year ended December December: see month. 31, 2001, it achieved record quarterly and annual per share earnings of $0.73 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share and $2.43 per diluted share, respectively, representing an increase of 9% and 37% compared to the quarter and year ended December 31, 2000, respectively. The Bank also reported consolidated net income of $3,231,000 and $11,186,000 for the quarter and year ended December 31, 2001, respectively, compared to $3,216,000 and $10,043,000 for the same periods in 2000. The Bank's total assets increased 37%, to approximately $1.1 billion at December 31, 2001, compared to approximately $771.5 million at December 31, 2000, reflecting the continued strength of the Bank's loan acquisition business. The Bank's loan and lease portfolio increased 27%, to $703.6 million at December 31, 2001, compared to $553.2 million at December 31, 2000. Despite the significant increases in the Bank's loan and lease portfolio and in total asset size, the Bank's asset quality numbers remain strong and it continues to maintain strong reserves. For instance, the Bank's allowance for loan and lease losses increased 82% to $23.3 million at December 31, 2001, compared to $12.8 million at December 31, 2000. "We are pleased to report another record-breaking Adj. 1. record-breaking - surpassing any previously established record; "a record-breaking high jump"; "record-breaking crowds" best - (superlative of `good') having the most positive qualities; "the best film of the year"; "the best solution"; "the best time for year for Capital Crossing Bank," noted Nicholas Nicholas, Russian grand duke Nicholas (Nikolai Nikolayevich) (nyĭkəlī` nyĭkəlī`əvĭch), 1856–1929, Russian grand duke and army officer; first cousin of Czar Alexander III and grandson of Czar W. Lazares, the Bank's Chairman and Co-Chief Executive Officer, "as we surpassed previous record-highs in per share earnings, consolidated net income, asset size and loan acquisitions. These results show the strength of our core business of acquiring loans and our ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. opportunities that arise in the marketplace. The loan acquisition business, as a whole, is a multi-billion dollar business and we are pleased with the niche we have carved carve v. carved, carv·ing, carves v.tr. 1. a. To divide into pieces by cutting; slice: carved a roast. b. for ourselves and the reputation we have earned. Our ability to acquire, in 2000 and 2001, respectively, $231.4 million and $422.5 million in principal loan balances cements our position as a major participant in the loan acquisition market and our reputation for doing quick, effective due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. and pricing makes us a desirable purchaser and strategic partner. Our ability to acquire a significant amount of loans, while at the same time maintaining very attractive asset quality ratios, proves the strength of our servicing capabilities." Richard Wayne Dr. Richard Wayne (April 4, 1804 – June 27, 1858) served as mayor of Savannah, Georgia for four terms: 1844 - 1845, 1848 - 1851, 1852 - 1853 and 1857 - 1858. He died while in office.[1] Wayne was the first mayor of Savannah elected by its citizens. , the Bank's President and Co-Chief Executive Officer, stated that "During 2001, the Bank realized significant increases in the size of its loan and lease portfolio while at the same time maintaining, for the fifth straight quarter, a ratio of total non-performing assets, net as a percent to total assets, of under one percent." Continuing, Mr. Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. noted, "Because of the lower contractual rates on the loans we acquired this year from the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Small Business Administration, we were able to purchase these loans at a significant discount. As a result, our discount on loan acquisitions in 2001 was $110.3 million, an increase of 673% compared to discount of $14.3 million for loans purchased in 2000. At December 31, 2001, the non-amortizing and amortizing discount on our entire portfolio was $53.1 million and $66.6 million, respectively, representing respective increases of 121% and 243%, compared to $24.0 million and $19.4 million at December 31, 2000." A significant portion of earnings for the quarter and year ended December 31, 2001 resulted from the recognition of approximately $5.5 million and $16.4 million, respectively, of "accelerated interest income" associated with loan payoffs. For the quarter and year ended December 31, 2000 accelerated interest income amounted to $4.8 million and $11.5 million, respectively. Of the $16.4 million recognized for the year ended December 31, 2001, $12.3 million represents the acceleration of discount upon payoff, with $4.5 million representing amortizing discount and $7.8 million representing non-amortizing discount. The remaining $4.1 million in accelerated interest income is primarily "off balance sheet" income that is not recorded until it is received and is comprised of a variety of loan fees, including late fees and prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. fees, pre-acquisition and default interest and receipt of payments on notes previously deemed uncollectible Adj. 1. uncollectible - not capable of being collected; "a bad (or uncollectible) debt" bad invalid - having no cogency or legal force; "invalid reasoning"; "an invalid driver's license" . In the last quarter of 2001, the Bank completed the common stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program that it commenced in August 2000. At completion, the Bank had repurchased 1,965,751 shares at a weighted average per share price of $11.19. The effect of the Bank's stock repurchase program, combined with its strong earnings, resulted in a 16% increase in the Bank's book value per share, to $18.19 at December 31, 2001 from $15.62 at December 31, 2000. During the second quarter of 2001, the Bank's subsidiary, Capital Crossing Preferred Corporation, closed on the public offering of $18.4 million of its series C preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. (NASDAQ:CCPCO), resulting in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to Capital Crossing Preferred of $16.9 million. Prior to consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the offering, the Bank received notification from the FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). that it would be able to treat a portion of the proceeds of the offering as Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. of the Bank. 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 Wednesday: see week. , January January: see month. 23rd at 10:00 a.m., Eastern time. The conference call will be broadcast over the investor relations Investor relations The process by which the corporation communicates with its investors. 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 for seven days on the website or via telephone at (800) 633-8284 or (858) 812-6440, reservation code #20196454. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding future events or financial performance. These statements are only predictions and actual events or results may differ materially. Factors which could cause such differences include changes in interest rates that adversely affect the Bank's business, the Bank's ability to successfully acquire loans at the same volume and the same yields as it has historically, material announcements by the Bank or its competitors, and the level of the Bank's non-performing assets as well as those other factors described in the Bank's periodic filings with the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. , specifically the cautionary statement identifying certain factors that could effect future results included in the Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial section of its most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. or Quarterly Report on Form 10-Q Form 10-Q See 10-Q. . Capital Crossing Bank is a Massachusetts-chartered, FDIC-insured trust company with approximately $1.1 billion in assets as of December 31, 2001. Capital Crossing operates as a commercial bank, providing financial products and services to customers through its executive and main offices in Boston, a branch in Chestnut Hill, Massachusetts Located six miles west of downtown Boston, Massachusetts, Chestnut Hill is a wealthy suburban village notable for its stately old houses, scenic landscape, and the historic campus of Boston College. , and its website at www.capitalcrossing.com. Capital Crossing specializes in purchasing loans, primarily secured by commercial and multi-family residential Multi-family residential is a classification of housing where multiple separate housing units are contained within one building. The most common form is an apartment building. Many intentional communities incorporate multi-family residences, such as in cohousing projects. real estate, at a discount to their outstanding principal balances. Capital Crossing has established a relationship banking division that leverages its strong capital base and credit skills to manage the special needs of business customers.
Capital Crossing Bank and Subsidiaries
Consolidated Financial Highlights
(Unaudited)
December 31, December 31,
2001 2000
(dollars in thousands, except per share data)
Total assets $ 1,054,698 $ 771,484
Loans and leases: 856,639 618,973
Non-amortizing discount (53,086) (23,985)
Amortizing discount (66,647) (19,412)
Allowance for loan
and lease losses (23,285) (12,818)
Net deferred loan
and lease income (10,011) (9,538)
Loans and leases, net 703,610 553,220
Short-term investments 246,285 118,345
Securities available for sale 59,675 57,733
Deposits 694,389 673,891
Borrowed funds 243,117 2,721
REIT preferred stock 29,503 12,636
Stockholders' equity 71,733 68,410
Non-performing assets:
Other real estate owned, net 833 1,025
Non-performing loans, net 4,965 1,993
Total non-performing
assets, net 5,798 3,018
Accruing loans past due ninety
days or more -- --
Total non-performing assets, net as
a percent to total assets 0.55% 0.39%
Allowance for loan and lease losses
as a percent of loans and leases,
net of discount and deferred income 3.20 2.26
Allowance for loan and lease losses
as a percent of non-performing
loans and leases 468.98 643.15
Book value per common share $ 18.19 $ 15.62
Tangible book value
per common share 17.08 14.56
Shares outstanding, net 3,944,469 4,380,819
Capital Crossing Bank and Subsidiaries
Consolidated Operating Results and Related Financial Data
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
2001 2000 2001 2000
(in thousands, except per share data)
Interest income $ 22,955 $ 22,627 $ 87,214 $ 78,502
Interest expense (10,429) (10,344) (41,032) (38,132)
Net interest income 12,526 12,283 46,182 40,370
Provision for
loan and
lease losses (298) (342) (1,100) (1,587)
Net interest
income, after
provision for loan
and lease losses 12,228 11,941 45,082 38,783
Gains on
sales of
loans and leases 2,022 10 2,022 2,586
Gain (loss) on
sales of
securities, net -- (32) 248 (43)
Other income 461 316 1,824 1,268
Operating expenses:
Other real estate
owned (expense)
income, net (196) 661 (202) 1,574
Other operating
expenses (8,488) (7,460) (28,840) (26,895)
Total operating
expenses (8,684) (6,799) (29,042) (25,321)
Income before
income taxes and
dividends on REIT
preferred stock 6,027 5,436 20,134 17,273
Provision for
income taxes (2,265) (1,995) (7,329) (6,326)
Dividends on REIT
preferred stock (531) (225) (1,619) (904)
Net income
available to
common stockholders $ 3,231 $ 3,216 $ 11,186 $ 10,043
Weighted average
shares outstanding:
Basic 3,971 4,633 4,159 5,448
Diluted 4,445 4,834 4,603 5,682
Earnings per share:
Basic $ 0.81 $ 0.69 $ 2.69 $ 1.84
Diluted 0.73 0.67 2.43 1.77
Financial ratios
(annualized):
Return on
average assets 1.25% 1.74% 1.26% 1.40%
Return on average
stockholders'
equity 18.18% 18.81% 16.05% 13.84%
Capital Crossing Bank and Subsidiaries
Interest Rate and Loan and Lease Volume Analysis
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
2001 2000 2001 2000
(dollars in thousands)
Weighted average
yield/rate
(annualized):
Short-term investments 2.11% 6.33% 3.70% 6.08%
Securities available
for sale 4.65 7.13 6.18 7.02
Loan and lease
portfolio, net 11.37 14.12 12.06 12.86
Total interest-earning
assets 9.01% 12.79% 10.06% 11.50%
Interest bearing
liabilities 4.61% 6.53% 5.32% 6.23%
Interest rate spread 4.40% 6.26% 4.74% 5.27%
Net interest margin 4.91% 6.94% 5.33% 5.91%
Loan and lease volume:
Loan originations $ 2,696 $ 10,530 $ 11,972 $ 23,796
Loan acquisitions
Loan balances 14,284 8,237 422,505 231,397
Discount (334) (898) (110,265) (14,271)
Loan acquisitions, net 13,950 7,339 312,240 217,126
Lease volume 9,660 6,942 31,236 28,192
Total loan and
lease volume, net $ 26,306 $ 24,811 $ 355,448 $ 269,114
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