CAPX Elkhorn S&P 500 Capital Expenditures Portfolio

Capital Crossing Bank (NASDAQ:CAPX) (the �Bank�) reported consolidated net income of $1.2 million, or $0.19 per diluted share, for the third quarter of 2006, compared to consolidated net income of $3.4 million, or $0.52 per diluted share, for the same period in 2005. The Bank also reported consolidated net income of $8.5 million, or $1.36 per diluted share, for the nine months ended September 30, 2006, compared to consolidated net income of $12.4 million, or $1.78 per diluted share, for the same period in 2005. The results for the three and nine months ended September 30, 2006 were directly impacted by merger expenses associated with the acquisition of the Bank by Lehman Brothers Bank, which are largely non-deductible for tax purposes. The merger expenses, net of taxes, totaled $1.8 million, or $0.29 per diluted share, for both the three and nine months ended September 30, 2006. Adjusted for the merger expenses, net of taxes, the Bank would have reported consolidated net income of $2.9 million, or $0.48 per diluted share, for the third quarter of 2006, and consolidated net income of $10.4 million, or $1.65 per diluted share, for the nine months ended September 30, 2006. Nicholas W. Lazares, the Bank�s Chairman and Co-Chief Executive Officer, stated, �We are pleased to report a solid quarter at Capital Crossing Bank.� Mr. Lazares further stated, �On September 19th, we announced that Lehman Brothers Bank would acquire us for cash consideration of $30.00 per share or an aggregate deal value of approximately $210 million. By combining with Lehman, we believe we can expand our opportunities for growth and earnings through increased access to capital which in turn will allow us to bid on a greater number of discounted loans. Our board and senior management has spent a considerable amount of time evaluating strategic alternatives for the Bank, and we believe that a merger with Lehman is in the best interests of our shareholders and the Bank given the competitive environment we have faced in recent years. We are very excited about this business combination and expect that the merger will allow us to grow our business and take it to the next level.� Mr. Lazares continued, �A significant portion of the Bank�s revenue arises from the recognition of �transactional� income. In the third quarter of 2006, the Bank recognized $10.0 million of transactional income, including $6.3 million of accelerated interest income associated with loan and lease payoffs, $1.2 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 third quarter of 2005, the Bank recognized $7.7 million of transactional income, including $6.9 million of accelerated interest income associated with loan and lease payoffs and $735,000 in net gains on sales of other real estate owned and assets in possession. Total transactional income for the nine months ended September 30, 2006 and 2005 amounted to $32.2 million and $27.5 million, respectively.� Richard Wayne, the Bank's President and Co-Chief Executive Officer, explained, �The volume of our loan acquisitions varies from quarter-to-quarter depending upon market conditions. For example, in the third quarter of 2006, we purchased loans with outstanding principal balances of $49.0 million for a purchase price of $42.6 million, compared to the same period in 2005, when we purchased loans with outstanding principal balances of $31.7 million for a purchase price of $25.9 million. In the nine months ended September 30, 2006, we purchased loans with outstanding principal balances of $176.6 million for a purchase price of $147.4 million, compared to the same period in 2005, when we purchased loans with outstanding principal balances of $131.3 million for a purchase price of $111.9 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, �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 September 30, 2006, we held loans and leases with net investment balances of $17.9 million which were acquired as non-performing. Our total non-performing assets increased $7.4 million from $42.5 million at December 31, 2005 to $49.9 million at September 30, 2006. 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 $815,000 was recorded for the nine months ended September 30, 2006 compared to a net credit for loan and lease losses of $2.2 million for the same period in 2005. During the nine months ended September 30, 2006, the Bank recorded an impairment provision of $879,000 and a provision for new loans acquired of $535,000. Similar provisions were not recorded in the same period in 2005. During the nine months ended September 30, 2006 and 2005, loan payoffs generated net credits for loan losses of $1.8 million and $3.2 million, respectively, the purpose of which was to reverse unused reserves related to the paid off loans. The provision for lease losses totaled $1.2 million and $925,000 for the nine months ended September 30, 2006 and 2005, respectively. A net provision for loan and lease losses of $242,000 was recorded in the third quarter of 2006 compared to a net credit for loan and lease losses of $688,000 for the same period in 2005. During the third quarter of 2006, the Bank's leasing subsidiary, Dolphin Capital Corp., originated leases with an aggregate investment balance of $20.8 million, compared to the same period in 2005 when it originated leases with an aggregate investment balance of $15.5 million. During the nine months ended September 30, 2006, Dolphin Capital originated leases with an aggregate investment balance of $59.9 million compared to the same period in 2005 when it originated leases with an aggregate investment balance of $45.6 million. The increase is partially attributable to the initiation of a more aggressive marketing campaign begun earlier this year. The Bank continued to repurchase shares of its common stock under its common stock repurchase program during the third quarter of 2006. However, pursuant to the terms of the merger agreement with Lehman, the Bank is not permitted to continue to repurchase shares of its common stock under the current repurchase program. Prior to entering into the merger agreement, 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. The Bank initiated its first repurchase program in August 2000. The measurement of the Bank�s net income and diluted earnings per share exclusive of the merger expenses, net of taxes, was determined by a method other than in accordance with accounting principals generally accepted in the United States of America (�GAAP�). The Bank believes that this supplemental information is essential to a proper understanding of its operating results for the three and nine months ended September 30, 2006 in light of the pending transaction with Lehman. However, such disclosure should not be viewed as a substitute for operating results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures which may be presented by other companies. Investors and interested parties will have the opportunity to listen to management�s discussion of the Bank�s quarterly and nine month results in a conference call to be held on Tuesday, October 24th at 9:00 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 #5094347. A replay of the call will be available beginning at approximately 12:00 p.m. on October 24, 2006 through midnight on October 30, 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 consummate the transaction with Lehman, 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 June 30, 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 September 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. Capital Crossing Bank and Subsidiaries Consolidated Financial Highlights (Unaudited) � � September 30, December 31, � 2006� � 2005� (dollars in thousands, except per share data) � Total assets $ 1,070,645� $ 1,106,158� � Loans and leases: 1,010,562� 1,004,120� Non-accretable discount (61,895) (53,407) Accretable discount (78,874) (84,894) Allowance for loan and lease losses (13,402) (15,585) Net deferred loan and lease income � (21,790) � (18,396) � Loans and leases, net � 834,601� � 831,838� � Short-term investments 67,600� 120,807� � Securities available for sale 98,914� 84,645� � Deposits 776,690� 723,388� � Borrowed funds 126,155� 218,849� � REIT preferred stock 64,758� 64,758� � Stockholders' equity 79,260� 76,499� � Non-performing assets: Other real estate owned, net 14,834� 14,003� Other assets in possession, net 407� 506� Non-performing loans and leases: Loans and leases acquired as non-performing 17,910� 14,078� Loans and leases that became non-performing subsequent to acquisition � 16,702� � 13,880� � Total non-performing assets, net � 49,853� � 42,467� � Total non-performing assets, net as a percent to total assets 4.66% 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 38.72� 55.74� � � Book value per common share $ 15.68� $ 14.52� Tangible book value per common share 14.81� 13.69� � Shares outstanding, net 5,055,578� 5,269,184� Capital Crossing Bank and Subsidiaries Consolidated Operating Results and Related Financial Data (Unaudited) � � Three Months Ended Nine Months Ended September 30, September 30, � 2006� � 2005� � 2006� � 2005� (in thousands, except per share data) � Interest income - regularly scheduled $ 19,428� $ 18,648� $ 57,079� $ 55,125� Interest income - accelerated � 6,256� � 6,921� � 15,236� � 19,031� � Total interest income 25,684� 25,569� 72,315� 74,156� Interest expense � (11,414) � (9,555) � (31,612) � (26,665) � Net interest income 14,270� 16,014� 40,703� 47,491� (Provision) credit for loan and lease losses � (242) � 688� � (815) � 2,238� � Net interest income, after (provision) credit for loan and lease losses 14,028� 16,702� 39,888� 49,729� � Gain on sales of loans, net 1,246� -� 10,812� -� Other income 438� 394� 1,318� 1,217� � Operating expenses: Merger expenses (1,938) -� (2,023) -� Other real estate owned and assets in possession income, net 1,915� 481� 4,586� 7,824� Other operating expenses � (10,517) � (9,631) � (32,326) � (31,252) � Total operating expenses � (10,540) � (9,150) � (29,763) � (23,428) � Income before income taxes, minority interest and dividends on REIT preferred stock 5,172� 7,946� 22,255� 27,518� Provision for income taxes (3,036) (3,497) (10,748) (12,219) Minority interest, net of taxes (54) (99) (200) (154) Dividends on REIT preferred stock, net of taxes � (927) � (927) � (2,781) � (2,781) � Net income $ 1,155� $ 3,423� $ 8,526� $ 12,364� � � Weighted average shares outstanding: Basic 5,061� 5,458� 5,160� 5,760� Diluted 6,173� 6,635� 6,280� 6,933� � Earnings per share: Basic $ 0.23� $ 0.63� $ 1.65� $ 2.15� Diluted 0.19� 0.52� 1.36� 1.78� � Financial ratios (annualized): Return on average assets 0.43% 1.32% 1.10% 1.60% Return on average stockholders' equity 5.88% 17.10% 14.68% 19.39% � � Transactional income: Interest and fee income on loan and lease pay-offs Non-accretable discount $ 2,119� $ 1,788� $ 4,078� $ 7,736� Accretable discount 2,317� 3,114� 7,005� 7,330� Other interest income � 1,820� � 2,019� � 4,153� � 3,965� � Total interest and fee income on loan and lease pay-offs 6,256� 6,921� 15,236� 19,031� Gain on sale of loans, net 1,246� -� 10,812� -� Gain on sale of other real estate owned and assets in possession, net � 2,463� � 735� � 6,119� � 8,468� � Total transactional income $ 9,965� $ 7,656� $ 32,167� $ 27,499� Capital Crossing Bank and Subsidiaries Interest Rate and Loan and Lease Volume Analysis (Unaudited) � � Three Months Ended Nine Months Ended September 30, September 30, � 2006� � 2005� � 2006� � 2005� (dollars in thousands) � Weighted average yield/rate (annualized): Short-term investments 5.26% 3.45% 4.81% 2.97% Securities available for sale 4.87� 4.62� 4.78� 4.68� Loan and lease portfolio, net 11.51� 11.71� 11.10� 11.35� � Total interest-earning assets 10.45% 10.34% 10.07% 10.16% � Interest bearing liabilities 5.12% 4.40% 4.88% 4.14% � Interest rate spread 5.33% 5.94% 5.19% 6.02% � Net interest margin 5.80% 6.48% 5.67% 6.51% � � Loan and lease volume: � Loan originations $ 2,950� $ -� $ 5,789� $ 508� Loan acquisitions: Loan balances 48,983� 31,723� 176,644� 131,348� Discount, net � (6,405) � (5,796) � (29,267) � (19,477) � Loan acquisitions, net � 42,578� � 25,927� � 147,377� � 111,871� � Total loan volume � 45,528� � 25,927� � 153,166� � 112,379� � Lease originations � 20,751� � 15,530� � 59,895� � 45,600� � Total lease volume � 20,751� � 15,530� � 59,895� � 45,600� � Total loan and lease volume, net $ 66,279� $ 41,457� $ 213,061� $ 157,979� Capital Crossing Bank (NASDAQ:CAPX) (the "Bank") reported consolidated net income of $1.2 million, or $0.19 per diluted share, for the third quarter of 2006, compared to consolidated net income of $3.4 million, or $0.52 per diluted share, for the same period in 2005. The Bank also reported consolidated net income of $8.5 million, or $1.36 per diluted share, for the nine months ended September 30, 2006, compared to consolidated net income of $12.4 million, or $1.78 per diluted share, for the same period in 2005. The results for the three and nine months ended September 30, 2006 were directly impacted by merger expenses associated with the acquisition of the Bank by Lehman Brothers Bank, which are largely non-deductible for tax purposes. The merger expenses, net of taxes, totaled $1.8 million, or $0.29 per diluted share, for both the three and nine months ended September 30, 2006. Adjusted for the merger expenses, net of taxes, the Bank would have reported consolidated net income of $2.9 million, or $0.48 per diluted share, for the third quarter of 2006, and consolidated net income of $10.4 million, or $1.65 per diluted share, for the nine months ended September 30, 2006. Nicholas W. Lazares, the Bank's Chairman and Co-Chief Executive Officer, stated, "We are pleased to report a solid quarter at Capital Crossing Bank." Mr. Lazares further stated, "On September 19th, we announced that Lehman Brothers Bank would acquire us for cash consideration of $30.00 per share or an aggregate deal value of approximately $210 million. By combining with Lehman, we believe we can expand our opportunities for growth and earnings through increased access to capital which in turn will allow us to bid on a greater number of discounted loans. Our board and senior management has spent a considerable amount of time evaluating strategic alternatives for the Bank, and we believe that a merger with Lehman is in the best interests of our shareholders and the Bank given the competitive environment we have faced in recent years. We are very excited about this business combination and expect that the merger will allow us to grow our business and take it to the next level." Mr. Lazares continued, "A significant portion of the Bank's revenue arises from the recognition of "transactional" income. In the third quarter of 2006, the Bank recognized $10.0 million of transactional income, including $6.3 million of accelerated interest income associated with loan and lease payoffs, $1.2 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 third quarter of 2005, the Bank recognized $7.7 million of transactional income, including $6.9 million of accelerated interest income associated with loan and lease payoffs and $735,000 in net gains on sales of other real estate owned and assets in possession. Total transactional income for the nine months ended September 30, 2006 and 2005 amounted to $32.2 million and $27.5 million, respectively." Richard Wayne, the Bank's President and Co-Chief Executive Officer, explained, "The volume of our loan acquisitions varies from quarter-to-quarter depending upon market conditions. For example, in the third quarter of 2006, we purchased loans with outstanding principal balances of $49.0 million for a purchase price of $42.6 million, compared to the same period in 2005, when we purchased loans with outstanding principal balances of $31.7 million for a purchase price of $25.9 million. In the nine months ended September 30, 2006, we purchased loans with outstanding principal balances of $176.6 million for a purchase price of $147.4 million, compared to the same period in 2005, when we purchased loans with outstanding principal balances of $131.3 million for a purchase price of $111.9 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, "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 September 30, 2006, we held loans and leases with net investment balances of $17.9 million which were acquired as non-performing. Our total non-performing assets increased $7.4 million from $42.5 million at December 31, 2005 to $49.9 million at September 30, 2006. 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 $815,000 was recorded for the nine months ended September 30, 2006 compared to a net credit for loan and lease losses of $2.2 million for the same period in 2005. During the nine months ended September 30, 2006, the Bank recorded an impairment provision of $879,000 and a provision for new loans acquired of $535,000. Similar provisions were not recorded in the same period in 2005. During the nine months ended September 30, 2006 and 2005, loan payoffs generated net credits for loan losses of $1.8 million and $3.2 million, respectively, the purpose of which was to reverse unused reserves related to the paid off loans. The provision for lease losses totaled $1.2 million and $925,000 for the nine months ended September 30, 2006 and 2005, respectively. A net provision for loan and lease losses of $242,000 was recorded in the third quarter of 2006 compared to a net credit for loan and lease losses of $688,000 for the same period in 2005. During the third quarter of 2006, the Bank's leasing subsidiary, Dolphin Capital Corp., originated leases with an aggregate investment balance of $20.8 million, compared to the same period in 2005 when it originated leases with an aggregate investment balance of $15.5 million. During the nine months ended September 30, 2006, Dolphin Capital originated leases with an aggregate investment balance of $59.9 million compared to the same period in 2005 when it originated leases with an aggregate investment balance of $45.6 million. The increase is partially attributable to the initiation of a more aggressive marketing campaign begun earlier this year. The Bank continued to repurchase shares of its common stock under its common stock repurchase program during the third quarter of 2006. However, pursuant to the terms of the merger agreement with Lehman, the Bank is not permitted to continue to repurchase shares of its common stock under the current repurchase program. Prior to entering into the merger agreement, 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. The Bank initiated its first repurchase program in August 2000. The measurement of the Bank's net income and diluted earnings per share exclusive of the merger expenses, net of taxes, was determined by a method other than in accordance with accounting principals generally accepted in the United States of America ("GAAP"). The Bank believes that this supplemental information is essential to a proper understanding of its operating results for the three and nine months ended September 30, 2006 in light of the pending transaction with Lehman. However, such disclosure should not be viewed as a substitute for operating results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures which may be presented by other companies. Investors and interested parties will have the opportunity to listen to management's discussion of the Bank's quarterly and nine month results in a conference call to be held on Tuesday, October 24th at 9:00 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 #5094347. A replay of the call will be available beginning at approximately 12:00 p.m. on October 24, 2006 through midnight on October 30, 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 consummate the transaction with Lehman, 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 June 30, 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 September 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. -0- *T Capital Crossing Bank and Subsidiaries Consolidated Financial Highlights (Unaudited) September 30, December 31, 2006 2005 ------------- ------------ (dollars in thousands, except per share data) Total assets $ 1,070,645 $ 1,106,158 Loans and leases: 1,010,562 1,004,120 Non-accretable discount (61,895) (53,407) Accretable discount (78,874) (84,894) Allowance for loan and lease losses (13,402) (15,585) Net deferred loan and lease income (21,790) (18,396) ------------- ------------ Loans and leases, net 834,601 831,838 ------------- ------------ Short-term investments 67,600 120,807 Securities available for sale 98,914 84,645 Deposits 776,690 723,388 Borrowed funds 126,155 218,849 REIT preferred stock 64,758 64,758 Stockholders' equity 79,260 76,499 Non-performing assets: Other real estate owned, net 14,834 14,003 Other assets in possession, net 407 506 Non-performing loans and leases: Loans and leases acquired as non- performing 17,910 14,078 Loans and leases that became non- performing subsequent to acquisition 16,702 13,880 ------------- ------------ Total non-performing assets, net 49,853 42,467 ------------- ------------ Total non-performing assets, net as a percent to total assets 4.66% 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 38.72 55.74 Book value per common share $ 15.68 $ 14.52 Tangible book value per common share 14.81 13.69 Shares outstanding, net 5,055,578 5,269,184 *T -0- *T Capital Crossing Bank and Subsidiaries Consolidated Operating Results and Related Financial Data (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------- 2006 2005 2006 2005 --------- -------- --------- --------- (in thousands, except per share data) Interest income - regularly scheduled $ 19,428 $18,648 $ 57,079 $ 55,125 Interest income - accelerated 6,256 6,921 15,236 19,031 --------- -------- --------- --------- Total interest income 25,684 25,569 72,315 74,156 Interest expense (11,414) (9,555) (31,612) (26,665) --------- -------- --------- --------- Net interest income 14,270 16,014 40,703 47,491 (Provision) credit for loan and lease losses (242) 688 (815) 2,238 --------- -------- --------- --------- Net interest income, after (provision) credit for loan and lease losses 14,028 16,702 39,888 49,729 Gain on sales of loans, net 1,246 - 10,812 - Other income 438 394 1,318 1,217 Operating expenses: Merger expenses (1,938) - (2,023) - Other real estate owned and assets in possession income, net 1,915 481 4,586 7,824 Other operating expenses (10,517) (9,631) (32,326) (31,252) --------- -------- --------- --------- Total operating expenses (10,540) (9,150) (29,763) (23,428) --------- -------- --------- --------- Income before income taxes, minority interest and dividends on REIT preferred stock 5,172 7,946 22,255 27,518 Provision for income taxes (3,036) (3,497) (10,748) (12,219) Minority interest, net of taxes (54) (99) (200) (154) Dividends on REIT preferred stock, net of taxes (927) (927) (2,781) (2,781) --------- -------- --------- --------- Net income $ 1,155 $ 3,423 $ 8,526 $ 12,364 ========= ======== ========= ========= Weighted average shares outstanding: Basic 5,061 5,458 5,160 5,760 Diluted 6,173 6,635 6,280 6,933 Earnings per share: Basic $ 0.23 $ 0.63 $ 1.65 $ 2.15 Diluted 0.19 0.52 1.36 1.78 Financial ratios (annualized): Return on average assets 0.43% 1.32% 1.10% 1.60% Return on average stockholders' equity 5.88% 17.10% 14.68% 19.39% Transactional income: Interest and fee income on loan and lease pay-offs Non-accretable discount $ 2,119 $ 1,788 $ 4,078 $ 7,736 Accretable discount 2,317 3,114 7,005 7,330 Other interest income 1,820 2,019 4,153 3,965 --------- -------- --------- --------- Total interest and fee income on loan and lease pay-offs 6,256 6,921 15,236 19,031 Gain on sale of loans, net 1,246 - 10,812 - Gain on sale of other real estate owned and assets in possession, net 2,463 735 6,119 8,468 --------- -------- --------- --------- Total transactional income $ 9,965 $ 7,656 $ 32,167 $ 27,499 ========= ======== ========= ========= *T -0- *T Capital Crossing Bank and Subsidiaries Interest Rate and Loan and Lease Volume Analysis (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------- 2006 2005 2006 2005 --------- -------- --------- --------- (dollars in thousands) Weighted average yield/rate (annualized): Short-term investments 5.26% 3.45% 4.81% 2.97% Securities available for sale 4.87 4.62 4.78 4.68 Loan and lease portfolio, net 11.51 11.71 11.10 11.35 Total interest- earning assets 10.45% 10.34% 10.07% 10.16% Interest bearing liabilities 5.12% 4.40% 4.88% 4.14% Interest rate spread 5.33% 5.94% 5.19% 6.02% Net interest margin 5.80% 6.48% 5.67% 6.51% Loan and lease volume: Loan originations $ 2,950 $ - $ 5,789 $ 508 Loan acquisitions: Loan balances 48,983 31,723 176,644 131,348 Discount, net (6,405) (5,796) (29,267) (19,477) --------- -------- --------- --------- Loan acquisitions, net 42,578 25,927 147,377 111,871 --------- -------- --------- --------- Total loan volume 45,528 25,927 153,166 112,379 --------- -------- --------- --------- Lease originations 20,751 15,530 59,895 45,600 --------- -------- --------- --------- Total lease volume 20,751 15,530 59,895 45,600 --------- -------- --------- --------- Total loan and lease volume, net $ 66,279 $41,457 $213,061 $157,979 ========= ======== ========= ========= *T