Business & Finance
Business and Finance
Business and Finance
Mon, May 11, 2009
Fri, May 8, 2009 Cape Bancorp, Inc.: Cape Bancorp, Inc. Reports First Quarter 2009 Results
CAPE MAY COURT HOUSE, NJ--(Marketwire - May 8, 2009) - Cape Bancorp, Inc. ("Cape Bancorp") (
Cape Bancorp reported a net loss of $99 thousand, or $0.01 per share, for the March, 2009 quarter, compared to a net loss of $42.2 million, or $3.43 per share reported for the quarter ended December 31, 2008. The current quarterly loss was largely the result of other-than-temporary impairment (OTTI) charges of $1.5 million on collateralized debt obligation investments in pooled trust preferred securities and a contractual compensation payout of $1.3 million.
Net interest margin for the quarter ended March 31, 2009 increased slightly to 3.53% from 3.52% for the quarter ended December 31, 2008. Return on average assets for the quarter ended March 31, 2009 improved to (0.04)% from (14.94)% for the quarter ended December 31, 2008. Return on average equity for the quarter ended March 31, 2009 improved to (0.28)% from (96.08)% for the quarter ended December 31, 2008.
At March 31, 2009, Cape Bancorp's total assets increased to $1.106 billion from $1.091 billion at December 31, 2008, an increase of $15.0 million or 1.37%. The increase is primarily attributed to increases in investment securities of $11.6 million, increases in net loans of $10.3 million, with these increases being partially offset with a decrease in interest earning deposits at other institutions of $7.6 million.
At March 31, 2009, Cape Bancorp's total net loans increased to $794.2 million from $783.9 million at December 31, 2008, an increase of $10.3 million or 1.31%. The change reflects an increase in mortgage loans of $4.6 million, commercial loans of $6.7 million and a decline in consumer loans of $300,000. This change is inclusive of an increase in the allowance for loan losses of $684,000.
Delinquent loans increased $3.8 million to $37.1 million or 4.6% of total gross loans at March 31, 2009 from $33.3 million, or 4.2% of total loans at December 31, 2008. Total delinquent loans by portfolio at March 31, 2009 were $30.1 million of commercial loans, $5.8 million of mortgage loans and $1.2 million of consumer loans. Delinquent loan balances by number of days delinquent were: 31 to 59 days -- $3.6 million; 60 to 89 days -- $3.4 million; and 90 days and greater -- $30.1 million.
At March 31, 2009, the Company had $30.1 million in non-performing loans or 3.73% of total gross loans, an increase from $21.1 million or 2.65% at December 31, 2008. Total non-performing loans by portfolio were $26.2 million of commercial loans, $3.5 million of mortgage loans and $400,000 of consumer loans. Commercial non-performing loans had collateral type concentrations of 13% in residential, duplex and multi-family related loans, 21% in land and building lot related loans, 6% in retail store related loans, 19% in restaurant related loans, 8% in marina related loans, 7% in auto dealership related loans, 12% in B&B and hotel related loans and 14% in commercial building and equipment related loans. The three largest relationships in this category of non-performing loans are $2.9 million, $2.8 million, and $2.1 million.
At March 31, 2009, Cape Bancorp's allowance for loan losses increased to $11.9 million from $11.2 million at December 31, 2008, an increase of $684,000 or 6.11%. The allowance for loan loss ratio increased to 1.48% of gross loans from 1.41% of gross loans at December 31, 2008. The allowance for loan losses to non-performing loan coverage ratio decreased to 39.67% at March 31, 2009 from 53.39% at December 31, 2008. Net charge-offs during the quarter ended March 31, 2009 were $61,000 compared to $5.6 million for the quarter ended December 31, 2008.
Cape Bancorp's total investment securities at March 31, 2009, increased to $175.1 million from $163.5 million at December 31, 2008, an increase of $11.6 million or 7.09%. Of this amount, investment securities classified as available-for-sale were $124.8 million, or 71.27% of total investment securities. At March 31, 2009, the cost basis of the collateralized debt obligation portion of the investment portfolio securities was $10.3 million with a fair market value of $1.4 million. Management will continue to monitor this portfolio for OTTI considering but not limited to factors such as downgrades to sub-investment grade (BBB), inadequate projected cash flows for contractual obligations, or continued decline in market valuation for a substantial period of time. For the quarter ended March 31, 2009, Cape Bancorp recognized an OTTI charge of $1.5 million on the collateralized debt obligation portion of the investment portfolio.
At March 31, 2009 Cape Bancorp's total deposits increased to $790.3 million from $711.1 million at December 31, 2008, an increase of $79.2 million or 11.14%. Core deposits (DDA, savings and money market accounts) increased to $374.9 million at March 31, 2009 from $351.9 million at December 31, 2008, an increase of $23.0 million or 6.54%. Money Markets deposits increased $32.6 million while DDA decreased by $9.6 million. Certificates of deposit increased to $409.6 million from $356.2 million at December 31, 2008, an increase of $53.4 million or 14.99%. The large increase in certificates of deposit is the result of marketing promotions during the first quarter, and the use of the CDARS program as a cost effective alternate funding source to borrowings. At March 31, 2009 CDARS deposits specifically used as an alternative funding source totaled $29.8 million.
At March 31, 2009, Cape Bancorp's total borrowings decreased to $168.1 million from $234.5 million at December 31, 2008, a decrease of $66.4 million or 28.32% which was facilitated by the increase in deposits.
Cape Bancorp's total equity increased to $141.2 million at March 31, 2009 from $140.7 million at December 31, 2008, an increase of $500 thousand or .36%. This slight increase is attributable to an improvement in accumulated other comprehensive loss of $500 thousand, net of tax. At March 31, 2009, stockholders' equity declined to 12.77% of total assets from 12.90% at December 31, 2008. Tangible equity totaled $117.9 million or 10.89% of period end tangible assets, a decrease from 10.99% at December 31, 2008. Tangible book value per share at March 31, 2009 was $8.86 compared to $8.81 at December 31, 2008.
Michael D. Devlin, President and Chief Executive Officer of Cape Bancorp and Cape Bank, provided the following statement:
"There was a change in leadership at the bank during the first quarter which impacted the organization both administratively and financially. In addition to the financial impact of the stresses associated with the national economy, the departure of the previous president generated a severance payment of $1.3 million. While there was some disruption due to the shift in management, Cape Bank is clearly focused on the tasks at hand.
"The principal focus of management continues to be the credit condition of the portfolio and the local economy. As a seasonal economy, the first and second quarters are traditionally a slow period which has been exacerbated by both the recession and the weakness in the gaming industry. Management monitors credit on a weekly basis and has been prompt in recognizing and acting upon troubled credits. While there have been some signs of slight improvement in the local economy in recent weeks, the success of the summer season will be of critical importance.
"Management is continuing with efforts to control costs and maximize the efficiencies from last year's merger. While big strides have been made, further reductions are anticipated.
"Finally, Cape is considering a stock buyback plan and has applied for approval from the regulators to take the steps necessary to implement such a plan. The board has indicated that if approval is granted this plan will purchase shares to be retired and not to fund previously approved restricted stock plans. The bank hopes to have a resolution of this matter in the second quarter."
CAPE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) March 31, December 31, 2009 2008 ----------- ----------- (in thousands) ASSETS Cash & due from financial institutions $ 12,176 $ 10,117 Federal funds sold - - ----------- ----------- Cash and cash equivalents 12,176 10,117 Interest-earning deposits in other financial institutions 10,332 17,918 Investment securities available for sale, at fair value (amortized cost of $133,185 at March 31, 2009 and $123,831 at December 31, 2008) 124,792 114,655 Investment securities held to maturity (fair value of $51,568 at March 31, 2009 and $49,938 at December 31, 2008) 50,337 48,825 Loans held for sale 576 - Loans, net of allowance of $11,924 and $11,240 794,226 783,869 Accrued interest receivable 5,048 4,736 Premises and equipment, net 27,233 27,342 Other real estate owned 538 798 Federal Home Loan Bank (FHLB) stock, at cost 8,614 11,602 Deferred income taxes 17,557 17,247 Bank owned life insurance (BOLI) 26,701 26,446 Goodwill 22,575 22,575 Intangible assets 731 786 Assets held for sale 2,026 2,026 Other assets 2,248 1,793 ----------- ----------- Total assets $ 1,105,710 $ 1,090,735 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Noninterest-bearing deposits $ 64,628 $ 63,258 Interest-bearing deposits 725,718 647,872 Borrowings 168,058 234,484 Advances from borrowers for taxes and insurance 600 585 Accrued interest payable 827 778 Other liabilities 4,656 3,033 ----------- ----------- Total liabilities 964,487 950,010 ----------- ----------- Stockholders' Equity Common stock, $.01 par value: authorized 100,000,000 shares; issued and outstanding 13,313,521 shares 133 133 Additional paid-in capital 126,775 126,801 Unearned ESOP shares (10,126) (10,232) Accumulated other comprehensive income (loss), net (5,505) (6,022) Retained earnings 29,946 30,045 ----------- ----------- Total stockholders' equity 141,223 140,725 ----------- ----------- Total liabilities & stockholders' equity $ 1,105,710 $ 1,090,735 =========== =========== CAPE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three months ended March 31, ---------------------- 2009 2008 ---------- ---------- (dollars in thousands, except share data) Interest income: Interest on loans $ 11,627 $ 11,048 Interest and dividends on investments Taxable 855 1,235 Tax-exempt 345 268 Interest on mortgage-backed securities 1,116 903 ---------- ---------- Total interest income 13,943 13,454 ---------- ---------- Interest expense: Interest on deposits 3,611 4,788 Interest on borrowings 1,596 1,429 ---------- ---------- Total interest expense 5,207 6,217 ---------- ---------- Net interest income before provision for loan losses 8,736 7,237 Provision for loan losses 745 283 ---------- ---------- Net interest income after provision for loan losses 7,991 6,954 ---------- ---------- Non-interest income: Service fees 709 666 Net gains on sale of loans 27 19 Net income from BOLI 292 266 Net rental income 86 84 Gain/(loss) on sales of investment securities available for sale, net - - Other than temporary impairment (1,539) - Loss on disposal of other assets - - Loss on sale of OREO (29) - Other 21 64 ---------- ---------- Total non-interest income (433) 1,099 ---------- ---------- Non-interest expense: Salaries and employee benefits 4,727 3,353 Occupancy and equipment 856 743 Federal insurance premiums 854 152 Data processing 279 318 Charitable foundation contribution - 6,256 Advertising 51 182 Telecommunications 202 175 Professional services 223 210 OREO write-down 68 - Other operating 824 885 ---------- ---------- Total non-interest expense 8,084 12,274 ---------- ---------- Income (loss) before income taxes (526) (4,221) Income tax expense (benefit) (427) (1,975) ---------- ---------- Net income (loss) $ (99) $ (2,246) ========== ========== Earnings (loss) per share (see Note 9): Basic $ (0.01) $ (0.22) Diluted $ (0.01) $ (0.22) Weighted average number of shares outstanding: Basic 12,296,879 12,311,190 Diluted 12,296,879 12,311,190 AVERAGE BALANCE SHEET (unaudited) For the Three Months Ended March 31, -------------------------------------------------------- 2009 2008 ---------------------------- -------------------------- Interest Interest Average Income/ Average Average Income/ Average Balance Expense Yield Balance Expense Yield ---------- -------- ------- -------- -------- ------- (dollars in thousands) Assets Interest-earning deposits $ 15,022 $ 66 1.76% $ 7,116 $ 74 4.18% Investments 187,947 2,250 4.79% 172,004 2,332 5.45% Loans 800,169 11,627 5.89% 677,393 11,048 6.56% ---------- -------- ------- -------- -------- ------- Total interest-earning assets 1,003,138 13,943 5.64% 856,513 13,454 6.32% Noninterest- earning assets 106,462 124,783 Allowance for loan losses (11,340) (6,717) ---------- -------- Total assets $1,098,260 $974,579 ========== ======== Liabilities and Stockholders' Equity Interest-bearing demand accounts $ 104,083 107 0.42% $107,782 309 1.15% Savings accounts 79,460 117 0.60% 81,265 313 1.55% Money market accounts 117,055 428 1.48% 109,975 904 3.31% Certificates of deposit 381,019 2,958 3.15% 325,059 3,262 4.04% Borrowings 205,162 1,597 3.16% 141,948 1,429 4.05% ---------- -------- ------- -------- -------- ------- Total interest-bearing liabilities 886,779 5,207 2.38% 766,029 6,217 3.26% Noninterest-bearing deposits 63,840 56,682 Other liabilities 6,230 3,502 ---------- -------- Total liabilities 956,849 826,213 Stockholders' equity 141,411 148,366 ---------- -------- Total liabilities & stockholders' equity $1,098,260 $974,579 ========== -------- ======== -------- Net interest income $ 8,736 $ 7,237 ======== ======== Net interest spread 3.26% 3.06% Net interest margin 3.53% 3.40% Net interest income and margin (tax equivalent basis) (1) $ 8,892 3.59% $ 7,352 3.45% ======== ======= ======== ======= Ratio of average interest-earning assets to average interest-bearing liabilities 113.12% 111.81% ========== ======== (1) In order to present pre-tax income and resultant yields on tax-exempt investments on a basis comparable to those on taxable investments, a tax equivalent yield adjustment is made to interest income. The tax equilvalent adjustment has been computed using a Federal income tax rate of 34%, and has the effect of increasing interest income by $156,000, and $115,000 for the three month period ended March 31, 2009 and 2008, respectively. The average yield on investments increased to 5.19% from 4.79% for the three month period ended March 31, 2009 and increased to 5.78% from 5.45% for the three month period ended March 31, 2008. SELECTED FINANCIAL DATA (unaudited) Three Months Ended ---------------------------------- March 31, December 31, March 31, 2009 2008 2008 ---------- ---------- ---------- (dollars in thousands, except per share data) Statements of Income Data: Interest income $ 13,943 $ 14,471 $ 13,454 Interest expense 5,207 5,664 6,217 ---------- ---------- ---------- Net interest income 8,736 8,807 7,237 Provision for loan losses 745 6,860 283 ---------- ---------- ---------- Net interest income after provision for loan losses 7,991 1,947 6,954 Non-interest income (433) (11,997) 1,099 Non-interest expense 8,084 38,251 12,274 ---------- ---------- ---------- Income (loss) before income taxes (526) (48,301) (4,221) Income tax expense (benefit) (427) (6,125) (1,975) ---------- ---------- ---------- Net income (loss) $ (99) $ (42,176) $ (2,246) ========== ========== ========== Earnings (loss) per share $ (0.01) $ (3.43) $ (0.22)(1) ========== ========== ========== Average shares outstanding 12,296,879 12,285,267 12,311,190 ========== ========== ========== Statements of Condition Data (Period End): Investments $ 175,129 $ 163,480 $ 199,816 Loans, net of allowance 794,226 783,869 789,957 Allowance for loan losses 11,924 11,240 8,175 Total assets 1,105,710 1,090,735 1,160,942 Total deposits 790,346 711,130 788,892 Total borrowings 168,058 234,484 180,304 Total equity 141,223 140,725 186,364 Operating Ratios: ROAA -0.04% -14.94% -0.92% ROAE -0.28% -96.08% -6.03% Net interest margin 3.53% 3.52% 3.40% Efficiency ratio 82.13% 382.55% 147.25% Equity to assets (end of period) 12.77% 12.90% 16.05% Tangible equity/tangible assets 10.89% 10.99% 11.86% Non-performing loans to total gross loans 3.73% 2.65% 1.82% Allowance for loan losses to non-performing loans 39.67% 53.39% 56.16% Allowance for loan losses to total gross loans 1.48% 1.41% 1.02% Book value $ 10.61 $ 10.57 $ 14.00 Tangible book value $ 8.86 $ 8.81 $ 9.85 Stock price $ 7.03 $ 9.25 $ 9.74 Price to book value 66.26% 87.51% 69.57% Price to tangible book value 79.35% 104.99% 98.88% (1) Earnings Per Share calculation in 2008 excludes $401,658 from year-to- date net income. This amount represents income earned by Cape Savings Bank (now Cape Bank) prior to the formation of Cape Bancorp. Earnings Per Share calculations use average outstanding shares which includes earned ESOP shares. DELINQUENCY TABLE (unaudited) Period Ending: March 31, 2009 -------------- --------------------------------------- Days Balances % of Total # of Loans ---- ------------ ----------- ------------ 31-59 $ 3,603,350 0.45% 27 60-89 $ 3,474,655 0.43% 23 90+ $ 30,061,971 3.73% 76 ------------ ----------- ------------ Total Delinquency $ 37,139,976 4.61% 126 Total Gross Loans Total $806,150,079 Days Commercial Consumer Mortgage ---- ------------ ----------- ------------ 31-59 $ 1,940,622 $ 575,557 $ 1,087,170 60-89 $ 2,054,939 $ 215,322 $ 1,204,394 90+ $ 26,167,509 $ 391,111 $ 3,503,351 ------------ ----------- ------------ Total Delinquency by Type $ 30,163,070 $ 1,181,990 $ 5,794,915 Total Loans by Type $517,746,676 $48,034,272 $240,369,131 % of Total Loans in Type 5.83% 2.46% 2.41% Total Delinquency $37,139,975 Period Ending: December 31, 2008 -------------- --------------------------------------- Days Balances % of Total # of Loans ---- ------------ ----------- ------------ 31-59 $ 5,938,319 0.75% 34 60-89 $ 6,277,807 0.79% 22 90+ $ 21,047,651 2.65% 60 ------------ ----------- ------------ Total Delinquency $ 33,263,777 4.18% 116 Total Gross Loans Total $795,109,112 Days Commercial Consumer Mortgage ---- ------------ ----------- ------------ 31-59 $ 2,642,290 $ 514,190 $ 2,781,839 60-89 $ 6,050,199 $ 122,274 $ 105,334 90+ $ 18,895,917 $ 338,547 $ 1,813,187 ------------ ----------- ------------ Total Delinquency by Type $ 27,588,406 $ 975,011 $ 4,700,360 Total Loans by Type $510,965,814 $48,350,426 $235,792,872 % of Total Loans in Type 5.40% 2.02% 1.99% Total Delinquency $33,263,777
This press release discusses primarily historical information. Statements included in this release, to the extent they are forward-looking, involve a number of risks and uncertainties such as competitive factors, economic conditions and regulatory changes in the banking industry. Further information on factors that could affect Cape Bancorp's financial results can be found in the Cape Bancorp's Form 10-K for the Year Ended December 31, 2008, which was filed by Cape Bancorp with the Securities and Exchange Commission on March 16, 2009.
