Capital Crossing Bank (NASDAQ:CAPX) (the "Bank") reported
consolidated net income of $3.0 million, or $0.46 per diluted
share, for the first quarter of 2006, compared to consolidated net
income of $4.7 million, or $0.65 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 earnings
arises from the recognition of "transactional" income. In the first
quarter of 2006, the Bank recognized $7.8 million of transactional
income, including $5.3 million of accelerated interest income
associated with loan and lease payoffs, $1.3 million on gain on
sales of loans and $1.2 million in net gain on sales of other real
estate owned and property in possession. By contrast, in the first
quarter of 2005, the Bank recognized $9.8 million of transactional
income, including $6.3 million of accelerated interest income
associated with loan and lease payoffs and $3.5 million in net gain
on sales of other real estate owned and property in possession.
Since the level of transactional income, including loan and lease
payoffs, 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 can also be
unpredictable from quarter-to-quarter. For example, in the first
quarter of 2006, we purchased loans with outstanding principal
balances of $34.8 million for a purchase price of $29.4 million,
compared to the same period in 2005, when we purchased loans with
outstanding principal balances of $50.9 million for a purchase
price of $44.4 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
acquire a loan portfolio." Mr. Wayne further stated, "Our total
non-performing assets increased $4.3 million from $42.5 million at
December 31, 2005 to $46.7 million at March 31, 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 March 31,
2006, we held loans and leases with net investment balances of
$11.8 million which were acquired as non-performing, compared to
$14.1 million at December 31, 2005. Additionally, the balance of
other real estate owned increased from $14.0 million at December
31, 2005 to $17.3 million at March 31, 2006. 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 the first quarter of 2006, the Bank's leasing
subsidiary, Dolphin Capital Corp., originated leases with an
aggregate investment balance of $19.2 million, compared to the same
period in 2005 when it originated leases with an aggregate
investment balance of $14.5 million. Dolphin Capital Corp.'s net
income was $409,000 for the quarter ended March 31, 2006 compared
to $870,000 for the same period in 2005. Since December 31, 2005,
the Bank's book value per share has increased $0.32 from $14.52 to
$14.84 at March 31, 2006. Additionally, the return on stockholders'
equity was 15.46% for the first quarter of 2006 compared to 21.01%
for the same period in 2005. The Bank continued to repurchase
shares of its common stock under its common stock repurchase
program during the first quarter of 2006. As of March 31, 2006, the
Bank had repurchased 7,020,678 shares under its current repurchase
program and previous repurchase programs at an average purchase
price of $13.11 per share, and had an additional $5.0 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 results in a conference call to
be held on Thursday, April 20th at 10:00 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 #8633294. A replay of the call will be available
beginning at approximately 1:00 P.M. on April 20, 2006 through
midnight on April 25, 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 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 the Bank's Annual Report on Form 10-K for the year ended
December 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 March 31, 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. -0- *T Capital Crossing Bank and Subsidiaries Consolidated
Financial Highlights (Unaudited) March 31, December 31, 2006 2005
------------- ----------- (dollars in thousands, except per share
data) Total assets $1,026,047 $1,106,158 Loans and leases: 990,673
1,004,120 Non-accretable discount (51,789) (53,407) Accretable
discount (84,257) (84,894) Allowance for loan and lease losses
(14,558) (15,585) Net deferred loan and lease income (19,533)
(18,396) ----------- ----------- Loans and leases, net 820,536
831,838 ----------- ----------- Short-term investments 30,884
120,807 Securities available for sale 97,914 84,645 Deposits
670,994 723,388 Borrowed funds 198,070 218,849 REIT preferred stock
64,758 64,758 Stockholders' equity 77,212 76,499 Non-performing
assets: Other real estate owned, net 17,324 14,003 Other assets in
possession 407 506 Non-performing loans and leases, net: Loans and
leases acquired as non- performing 11,811 14,078 Loans and leases
that became non- performing subsequent to acquisition 17,197 13,880
----------- ----------- Total non-performing assets, net 46,739
42,467 ----------- ----------- Total non-performing assets, net as
a percent to total assets 4.56 % 3.84 % Allowance for loan and
lease losses as a percent of loans and leases, net of discount and
deferred income 1.74 1.84 Allowance for loan and lease losses as a
percent of net non-performing loans and leases 50.19 55.74 Book
value per common share $14.84 $14.52 Tangible book value per common
share 14.00 13.69 Shares outstanding, net 5,203,189 5,269,184
Capital Crossing Bank and Subsidiaries Consolidated Operating
Results and Related Financial Data (Unaudited) Three Months Ended
March 31, ----------------- 2006 2005 -------- -------- (in
thousands, except per share data) Interest income - regularly
scheduled $19,045 $18,059 Interest income - transactional 5,317
6,314 -------- -------- Total interest income 24,362 24,373
Interest expense (9,753) (8,200) -------- -------- Net interest
income 14,609 16,173 Credit for loan and lease losses, net 549
1,040 -------- -------- Net interest income, after credit for loan
and lease losses 15,158 17,213 Gain on sales of loans, net 1,329 -
Other income 460 402 Operating expenses: Other real estate owned
and assets in possession income, net 802 3,414 Other operating
expenses (10,621) (11,023) -------- -------- Total operating
expenses (9,819) (7,609) -------- -------- Income before income
taxes, minority interest and dividends on REIT preferred stock
7,128 10,006 Provision for income taxes (3,185) (4,391) Minority
interest, net of taxes (55) (32) Dividends on REIT preferred stock,
net of taxes (927) (927) -------- -------- Net income $2,961 $4,656
======== ======== Weighted average shares outstanding: Basic 5,255
6,025 Diluted 6,399 7,207 Earnings per share: Basic $0.56 $0.77
Diluted 0.46 0.65 Financial ratios (annualized): Return on average
assets 1.17% 1.81% Return on average stockholders' equity 15.46%
21.01% Transactional income: Interest and fee income on loan and
lease pay-offs Non-accretable discount $684 $3,617 Accretable
discount 2,926 2,204 Other interest income 1,707 493 --------
-------- Total interest and fee income on loan and lease pay-offs
5,317 6,314 Gain on sale of loans, net 1,329 - Gain on sale of
other real estate owned and assets in possession, net 1,202 3,473
-------- -------- Total transactional income $7,848 $9,787 ========
======== Capital Crossing Bank and Subsidiaries Interest Rate and
Loan and Lease Volume Analysis (Unaudited) Three Months Ended March
31, ------------------- 2006 2005 --------- -------- (dollars in
thousands) Weighted average yield/rate (annualized): Short-term
investments 4.40 % 2.42 % Securities available for sale 4.71 4.68
Loan and lease portfolio, net 11.48 11.28 Total interest-earning
assets 10.36 % 10.09 % Interest bearing liabilities 4.62 % 3.85 %
Interest rate spread 5.74 % 6.24 % Net interest margin 6.21 % 6.69
% Loan and lease volume: Loan originations $2,175 $508 Loan
acquisitions Loan balances 34,796 50,908 (Discount) premium, net
(5,430) (6,485) -------- -------- Loan acquisitions, net 29,366
44,423 -------- -------- Total loan volume 31,541 44,931 --------
-------- Lease originations 19,156 14,526 Lease acquisitions, net -
- -------- -------- Total lease volume 19,156 14,526 --------
-------- Total loan and lease volume, net $50,697 $59,457 ========
======== *T
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