Capital Crossing Bank Announces Record Quarterly Earnings.Business Editors BOSTON--(BUSINESS WIRE)--April 18, 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 consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net income for the quarter ended March 31, 2002 of $3,880,000, or $0.88 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, compared to $2,056,000, or $0.44 per diluted share, for the same quarter in 2001. Net income during the first quarter of 2002 included approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $306,000, or $0.07 per diluted share, attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a change in accounting principle that occurred as a result of the Bank's adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " which ends the practice of amortizing goodwill ("Statement 142"). In part, Statement 142 required that the Bank recognize as income the $306,000 in unaccreted negative goodwill existing at January January: see month. 1, 2002 as a result of the Bank's acquisition, in December December: see month. 1994, of Chestnut Hill Chestnut Hill may refer to: In geography:
In addition, Statement 142 requires the periodic testing of goodwill for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. . As of January 1, 2002, the Bank performed the required impairment tests of goodwill and determined that no impairment adjustment is required. For purposes of providing a comparison to the Bank's first quarter 2002 financial results, the Bank recognized amortization expense of $67,000 during the first quarter of 2001. In the first quarter of 2002, the Bank purchased loans with outstanding principal balances of $56.1 million at a purchase price of $44.8 million, compared to the first quarter of 2001 wherein where·in adv. In what way; how: Wherein have we sinned? conj. 1. In which location; where: the country wherein those people live. 2. the Bank purchased loans with outstanding principal balances of $84.9 million at a purchase price of $57.4 million. A significant portion of the Bank's earnings continues to arise from the recognition of "transactional" income. For the quarter ended March 31, 2002, the Bank recognized approximately $6.9 million in transactional income, including $6.3 million of accelerated interest income associated with loan payoffs and $517,000 in gains on sales of loans. Accelerated interest income for the first quarter of 2002 includes $681,000 in various loan fees and $5.7 million of accelerated discount upon payoff, of which $3.1 million is amortizing discount and $2.6 million is non-amortizing discount. "We are happy to report yet another strong quarter at Capital Crossing Bank, as we continue to leverage our core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
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. "Our record earnings this quarter were significantly impacted by our strong loan purchasing activity and by an uncharacteristically un·char·ac·ter·is·tic adj. Unusual or atypical: an uncharacteristic display of anger. un high volume of transactional income resulting from loan payoffs. The nature of the loan acquisition business means that there can be significant fluctuations in the volume of loan purchases and loan payoffs and these fluctuations are, to a certain extent, unpredictable in nature and dependent upon factors outside of our control. As a result, significantly higher or lower transactional income or loan purchasing volume in any given period will have a corresponding impact on the level of the Bank's earnings." Continuing, 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, noted that "The Bank continues to maintain strong reserves, as its allowance for loan and lease losses increased from $23.3 million at December 31, 2001, representing 468.98% of nonperforming loans and leases, to $24.3 million at March 31, 2002, representing 513.79% of nonperforming loans and leases. The expertise of our acquisitions and asset management teams is the primary reason that we have been able to maintain attractive asset quality and allowance ratios and this expertise also provides the Bank with the flexibility to consider a wide range of loan purchasing opportunities. This expertise is acknowledged in the industry as the Bank continues to be a sought-after Adj. 1. sought-after - being searched for; "the most sought-after item was the silver candelabrum" sought wanted - desired or wished for or sought; "couldn't keep her eyes off the wanted toy"; "a wanted criminal"; "a wanted poster" purchaser of loans and a strategic ally with other large financial institutions in the acquisition of loans. We have also leveraged the servicing expertise at our leasing subsidiary, Dolphin dolphin, fish dolphin, large, swift game fish, Coryphaena hipparus, also called dorado. It is of nearly worldwide distribution in warm waters. Capital, to assist in the management of smaller balance, performing loans." On March 13, 2002, the Bank announced the commencement of an additional stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program, whereby the Bank is authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. up to $5 million of its common stock in open market or privately negotiated transactions. As of March 31, 2002, the Bank has repurchased 132,400 shares at a weighted average per share price of $22.20. Combined with the effects of its repurchase program completed in 2001, to date the Bank has repurchased a total of 2,098,151 shares at a weighted average per share price of $11.89. As a result of the Bank's common stock repurchase programs and its strong earnings, the Bank's book value per share at March 31, 2002 was $19.10. Investors and interested parties will have the opportunity to listen to management's discussion of the Bank's quarterly results in a conference call to be held on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , April 19th at 11:00 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 on the website for seven days or for seven days via telephone at (800) 428-6051 or (973) 709-2089, reservation code #238400. 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 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 payoffs and the sale of real estate and loans, the Bank's ability to successfully diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. its asset base, the level of the Bank's non-performing assets, the Bank's ability to successfully conduct its leasing business, 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. . The Bank undertakes no obligation to publicly update any forward-looking statement. Capital Crossing Bank is a Massachusetts-chartered, FDIC-insured trust company with $894.3 million in assets as of March 31, 2002. Capital Crossing operates as a commercial bank, providing financial products and services to customers through its executive and main offices in Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. , 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 Bank and Subsidiaries
Consolidated Financial Highlights
(Unaudited)
March 31, December 31,
2002 2001
(dollars in thousands, except per share data)
Total assets $ 894,316 $ 1,054,698
Loans and leases: 859,215 856,639
Non-amortizing discount (58,473) (53,086)
Amortizing discount (61,881) (66,647)
Allowance for loan and lease losses (24,256) (23,285)
Net deferred loan and lease income (10,621) (10,011)
Loans and leases, net 703,984 703,610
Short-term investments 88,048 246,285
Securities available for sale 57,929 59,675
Deposits 639,972 694,389
Borrowed funds 142,057 243,117
REIT preferred stock 29,503 29,503
Stockholders' equity 72,871 71,733
Non-performing assets:
Other real estate owned, net 2,272 833
Non-performing loans, net 4,721 4,965
Total non-performing assets, net 6,993 5,798
Accruing loans past due ninety days or more -- --
Total non-performing assets, net as
a percent to total assets 0.78% 0.55%
Allowance for loan and lease losses
as a percent of loans and leases,
net of discount and deferred income 3.33 3.20
Allowance for loan and lease losses
as a percent of net non-performing
loans and leases 513.79 468.98
Book value per common share $ 19.10 $ 18.19
Tangible book value per common share 17.95 17.08
Shares outstanding, net 3,815,735 3,944,469
Capital Crossing Bank and Subsidiaries
Consolidated Operating Results and Related Financial Data
(Unaudited)
Three Months Ended
March 31,
2002 2001
(in thousands, except per share data)
Interest income - regularly scheduled $ 16,254 $ 18,798
Interest income - accelerated 6,347 2,594
Total interest income 22,601 21,392
Interest expense (8,686) (11,530)
Net interest income 13,915 9,862
Provision for loan and lease losses (248) (316)
Net interest income, after provision
for loan and lease losses 13,667 9,546
Gains on sales of loans and leases 517 --
Gain on sales of securities, net -- 98
Other income 312 513
Operating expenses:
Other real estate owned income, net 35 18
Other operating expenses (7,586) (6,613)
Total operating expenses (7,551) (6,595)
Income before income taxes, minority
interest, dividends on REIT
preferred stock and change in
accounting principle 6,945 3,562
Provision for income taxes (2,614) (1,281)
Minority interest, net of taxes (225) --
Dividends on REIT preferred stock,
net of taxes (532) (225)
Net income before cumulative
change in accounting principle 3,574 2,056
Cumulative change in accounting principle 306 --
Net income $ 3,880 $ 2,056
Weighted average shares outstanding:
Basic 3,931 4,313
Diluted 4,406 4,678
Basic earnings per common share:
Income before cumulative change
in accounting principle $ 0.91 $ 0.48
Cumulative effect of change
in accounting principle 0.08 --
Net income $ 0.99 $ 0.48
Diluted earnings per common share:
Income before cumulative change
in accounting principle $ 0.81 $ 0.44
Cumulative effect of change
in accounting principle 0.07 --
Net income $ 0.88 $ 0.44
Financial ratios (annualized):
Return on average assets 1.71% 0.97%
Return on average stockholders' equity 21.37% 12.19%
Capital Crossing Bank and Subsidiaries
Interest Rate and Loan and Lease Volume Analysis
(Unaudited)
Three Months Ended
March 31,
2002 2001
(dollars in thousands)
Weighted average yield/rate (annualized):
Short-term investments 1.86% 5.49%
Securities available for sale 5.79 7.09
Loan and lease portfolio, net 12.05 12.25
Total interest-earning assets 10.14% 10.44%
Interest bearing liabilities 4.48% 6.24%
Interest rate spread 5.66% 4.20%
Net interest margin 6.24% 4.81%
Loan and lease volume:
Loan originations $ 1,430 $ 4,297
Loan acquisitions
Loan balances 56,124 84,872
Discount (11,330) (27,471)
Loan acquisitions, net 44,794 57,401
Lease volume 11,160 6,373
Total loan and lease
volume, net $ 57,384 $ 68,071
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