SOURCE: Cape Bancorp, Inc.

Cape Bancorp, Inc.

January 28, 2010 20:21 ET

Cape Bancorp, Inc. Reports Fourth Quarter and Annual 2009 Results

CAPE MAY COURT HOUSE, NJ--(Marketwire - January 28, 2010) - Cape Bancorp, Inc. ("Cape Bancorp" or the "Company") (NASDAQ: CBNJ), the parent company of Cape Bank, announces its operating results for the quarter and year ended December 31, 2009.

For the quarter ended December 31, 2009, Cape Bancorp reported net income of $1.2 million, or $.10 per share, compared to net loss of $19.1 million or $1.55 per share for the linked quarter ended September 30, 2009. We are providing linked quarter information in order to provide meaningful insight into the effects of the economic downturn on our business. The following is a summary of significant differences in the components comprising net income for the linked quarters: loan loss provision Q3 2009 - $9.8 million, Q4 2009 - $785,000; loan related expense Q3 2009 - $379,000, Q4 2009 - $1.1 million; other-than-temporary-impairment (OTTI) Q3 2009 - $799,000, Q4 2009 - $292,000; other real estate owned (OREO) expense Q3 2009 - $92,000, Q4 2009 - $431,000; income tax expense Q3 2009 - $12.6 million primarily related to the establishment of a deferred tax asset allowance, Q4 2009 - no tax expense.

The net loss for the year ended December 31, 2009 was $17.9 million, or $1.45 per share compared to a net loss of $42.5 million or $3.49 per share for the year ended December 31, 2008. The following is a summary of significant differences in the components comprising the net loss for the years ended December 31, 2008 and 2009: loan loss provision 2008 - $9.0 million, 2009 - $13.2 million; loan related expense 2008 - $280,000, 2009 - $1.8 million; other-than-temporary-impairment (OTTI) 2008 - $15.6 million, 2009 - $5.1 million; FDIC Insurance premium 2008 - $525,000, 2009 - $1.7 million; other real estate owned (OREO) expense 2008 - $4,000, 2009 - $628,000; donation in 2008 to create Cape Charitable Foundation $6.3 million, 2009 - no Cape Charitable Foundation contribution required in 2009; goodwill impairment 2008 - $31.8 million, 2009 - no impairment; income tax expense 2008 - $8.2 million tax benefit, 2009 - $12.0 million tax expense primarily related to the establishment of a deferred tax asset allowance.

At December 31, 2009, Cape Bancorp's total assets increased to $1.073 billion from $1.067 billion at September 30, 2009, an increase of $6.0 million or 0.56%. Total assets decreased $17.9 million or 1.64% from December 31, 2008.

Cape Bancorp's total net loans decreased to $789.5 million at December 31, 2009, from $789.6 million at September 30, 2009, a decrease of $149,000 or 0.02%. This change is the net result of a decrease in commercial loans of $1.9 million, offset in part by an increase in mortgage loans of $1.0 million, an increase in consumer loans of $314,000 and a decrease in the allowance for loan losses of $467,000. Net loans increased $5.6 million or 0.71% since December 31, 2008.

Delinquent loans decreased $2.7 million to $34.4 million or 4.3% of total gross loans at December 31, 2009 from $37.1 million, or 4.6% of total gross loans at September 30, 2009. Total delinquent loans by portfolio at December 31, 2009 were comprised of $26.8 million of commercial mortgage and commercial business loans, $6.7 million of residential mortgage loans and $941,000 of consumer loans. Delinquent loan balances by number of days delinquent were: 31 to 59 days - $3.2 million; 60 to 89 days - $2.5 million; 90 days and greater - $28.7 million. Additionally, at December 31, 2009, Cape Bancorp had $4.5 million (of which one loan in the amount of $92,000 is 60 to 89 days delinquent) of loans that were performing in accordance with their repayment terms but the Company was not accruing interest because of deterioration in the financial condition of the borrower. These loans consist of six secured commercial loans represented by three borrowers, one of whom has four loans totaling $4.2 million, and each of the remaining two borrowers with balances of $46,000 and $214,000 respectively.

At December 31, 2009, the Company had $33.2 million in non-performing loans or 4.14% of total gross loans, a decrease of $3.1 million from $36.3 million or 4.52% at September 30, 2009. Total non-performing loans by portfolio were comprised of $29.5 million of commercial loans, $3.3 million of mortgage loans and $482,000 of consumer loans. Of these stated delinquencies, the Company had $1.3 million of loans that were 90 days or more delinquent and still accruing (6 residential mortgage loans for $1.2 million and 1 consumer loan for $84,000). These loans are well secured and we anticipate no losses will be incurred. Of the commercial non-performing loans, $3.5 million (13 loans or 12%) were secured by residential, duplex and multi-family properties, $3.6 million (9 loans or 12%) were secured by land and building lots, $2.2 million (8 loans or 7%) were secured by retail stores, $4.6 million (10 loans or 15%) were secured by restaurant properties, $2.0 million (2 loans or 7%) were secured by marina properties, $1.8 million (2 loans or 6%) were secured by auto dealerships, $2.9 million ( 6 loans or 10%) were secured by B&B and hotels and $8.9 million (21 loans or 28%) were secured by commercial buildings and equipment. The three largest relationships in this category of non-performing loans are $4.4 million, $2.8 million, and $2.0 million.

At December 31, 2009, Cape Bancorp's allowance for loan losses decreased to $13.3 million from $13.8 million at September 30, 2009, a decrease of $467,000 or 3.39%. At December 31, 2008 the balance for allowance for loan losses was $11.2 million. The allowance for loan loss ratio decreased to 1.66% of gross loans at December 31, 2009 from 1.71% of gross loans at September 30, 2009. The allowance for loan loss ratio at December 31, 2008 was 1.41%. The allowance for loan losses to non-performing loan coverage ratio increased to 40.04% at December 31, 2009 from 37.93% at September 30, 2009. Charge-offs during the quarter ended December 31, 2009 were $1.4 million compared to $8.1 million for the quarter ended September 30, 2009. Charge-offs for the year ended December 31, 2009 were $11.7 million compared to $5.7 million for the year ended December 31, 2008. Loan loss recoveries totaled $159,000 for the quarter ended December 31, 2009, compared to $9,000 for the quarter ended September 30, 2009. Loan loss recoveries for the year ended December 31, 2009 were $568,000 compared to $27,000 for the year ended December 31, 2008.

OREO increased to $4.8 million at December 31, 2009 from $508,000 at September 30, 2009. During the quarter ended December 31, 2009 four residential and six commercial properties were placed into OREO at values of $2.4 million and $3.3 million respectively. Also, one of the residential properties placed into OREO during the fourth quarter was sold for a net loss of $313,000. Currently, the Bank has two of the OREO properties, carried at an aggregate value of $3.3 million, under contract to sell at prices greater than their current carrying value in OREO. Both transactions are scheduled to close prior to March 31, 2010. OREO as of December 31, 2008 was $798,000.

Cape Bancorp's total investment securities portfolio decreased to $152.8 million at December 31, 2009, from $156.5 million at September 30, 2009, a decrease of $3.7 million or 2.4%. Effective December 31, 2009 the Company re-classified the Held-To-Maturity (HTM) portion of its investment portfolio, with a market value of $44.5 million and an amortized cost of $43.0 million to Available-For-Sale (AFS). This change in classification provides flexibility and enables the Company to respond more effectively to changes in market value of the investment portfolio as well as enhances its sources of liquidity. At December 31, 2009, the cost basis of the collateralized debt obligation (CDO) portion of the investment portfolio securities was $13.0 million with a fair market value of $1.5 million. For the quarter ended December 31, 2009 Cape Bancorp recognized a credit related OTTI charge of $292,000 on the CDO portion of the investment portfolio. For the year ended December 31, 2009, a credit related OTTI charge of $5.1 million was recognized by the Company as compared to $15.6 million for the year ended December 31, 2008.

At December 31, 2009, Cape Bancorp's total deposits decreased to $736.6 million from $763.4 million at September 30, 2009, a decrease of $26.8 million or 3.51%. Decreases in certificates of deposit ($20.3 million), brokered deposits ($8.5 million) and internal accounts ($4.3 million) were partially offset by increases of $5.3 million in core deposit accounts (interest-bearing and non-interest-bearing checking accounts, MMDA and savings accounts), and $1.0 million in Certificate of Deposit Account Registry Service (CDARS) deposits. The decrease in certificates of deposit resulted directly from deposit repricing strategies. Total deposits increased $25.5 million or 3.58% from December 31, 2008.

At December 31, 2009, Cape Bancorp's total borrowings increased to $204.0 million from $173.5 million at September 30, 2009, an increase of $30.5 million or 17.55%. Total borrowings decreased $30.5 million or 13.01% from the December 31, 2008 balance of $234.5 million.

Cape Bancorp's total equity increased to $126.5 million at December 31, 2009 from $124.7 million at September 30, 2009, an increase of $1.8 million or 1.50%. The increase in equity was attributable to the net income of $1.2 million and a decrease in accumulated other comprehensive loss, net of tax of $568,000. This decrease in accumulated other comprehensive loss is primarily a result of the portfolio gains net of tax arising from the reclassification of the HTM investment portfolio to AFS. Cape Bank continued to maintain its well capitalized status for regulatory purposes.

Michael D. Devlin, President and Chief Executive Officer of Cape Bancorp and Cape Bank, provided the following statement:

We are very pleased to announce earnings for the fourth quarter.

Of equal importance, we saw positive movement with our troubled assets as properties completed the long foreclosure process allowing for their sale. Two of the additions to OREO are under agreement and are scheduled to close within the first quarter at prices that meet or exceed their book value. Overall, it appears that more troubled assets are closer to disposition with fewer loans entering the workout process. This coupled with a moderating commercial loan delinquency trend is prompting some modest optimism.

We recognize that the first quarter is the low point in cash flows for many of our seasonal customers and we are alert to potential loan deterioration due to this factor. Preliminary indications are that the past season was off 7% to 10% for most industries -- painful, but generally not catastrophic. It also appears that the decline was as much weather related (23 days of rain in June) as due to economically burdened families foregoing vacation.

While 2010 may not be a return to a robust economy, we believe it may be an improvement over our recent history. Management will continue to focus on two areas that it believes will provide the greatest value to shareholders -- enhance earnings and reduce troubled assets.



                         SELECTED FINANCIAL DATA
                               (unaudited)

                            Cape Bancorp Inc.


                                             Three Months Ended
                                  ----------------------------------------
                                  December 31,  September 30,  December 31,
                      YTD 2009        2009          2009          2008
                    ------------  ------------  ------------  ------------
                                       (dollars in thousands, except
                                               per share data)
Statements of
 Income Data:
Interest income     $     54,533  $     13,189  $     13,409  $     14,471
Interest expense          19,028         4,260         4,487         5,664
                    ------------  ------------  ------------  ------------
  Net interest
   income                 35,505         8,929         8,922         8,807
Provision for loan
 losses                   13,159           785         9,765         6,860
                    ------------  ------------  ------------  ------------
  Net interest
   income after
   provision for
   loan losses            22,346         8,144          (843)        1,947
Non-interest income          932           908           888       (11,997)
Non-interest
 expense                  29,168         7,822         6,609        38,251
                    ------------  ------------  ------------  ------------
Income (loss)
 before income
 taxes                    (5,890)        1,230        (6,564)      (48,301)
Income tax expense
 (benefit)                12,011             0        12,571        (6,125)
                    ------------  ------------  ------------  ------------
Net income (loss)   $    (17,901) $      1,230  $    (19,135) $    (42,176)
                    ============  ============  ============  ============

Earnings (loss) per
 share(1)           $      (1.45) $       0.10  $      (1.55) $      (3.43)
                    ============  ============  ============  ============
Average shares
 outstanding          12,312,714    12,328,321    12,317,638    12,285,267
                    ============  ============  ============  ============
Shares issued                       13,313,521    13,313,521    13,313,521
                                  ============  ============  ============

Statements of
 Condition Data
 (Period End):
Investments                       $    152,815  $    156,455  $    163,480
Loans, net of
 allowance                             789,473       789,622       783,869
Allowance for loan
 losses                                 13,311        13,778        11,240
Total assets                         1,072,821     1,067,239     1,090,735
Total deposits                         736,587       763,420       711,130
Total borrowings                       203,981       173,532       234,484
Total equity                           126,548       124,681       140,725

Statements of
 Condition Data
 (Average Balance):
Total
 interest-earning
 assets             $  1,004,376  $    991,773  $  1,004,220  $  1,014,972
Total
 interest-bearing
 liabilities             880,152       870,796       872,223       880,005

Operating Ratios:
ROAA                       -1.64%         0.46%        -6.98%       -14.94%
ROAE                      -12.89%         3.89%       -52.87%       -96.08%
Yield on Earning
 Assets                     5.43%         5.28%         5.30%         5.78%
Cost of Interest
 Bearing
 Liabilities                2.16%         1.94%         2.04%         2.56%
Net interest margin         3.54%         3.57%         3.52%         3.52%
Efficiency ratio(2)        69.19%        77.23%        66.00%       382.55%
Equity to assets
 (end of period)                         11.80%        11.68%        12.90%
Tangible
 equity/tangible
 assets                                   9.85%         9.72%        10.99%
Non-performing
 loans to total
 gross loans                              4.14%         4.52%         2.65%
Allowance for loan
 losses to
 non-performing
 loans                                   40.04%        37.93%        53.39%
Allowance for loan
 losses to total
 gross loans                              1.66%         1.71%         1.41%
Book value                        $       9.51  $       9.37  $      10.57
Tangible book value               $       7.76  $       7.62  $       8.81
Stock price                       $       6.72  $       7.68  $       9.25
Price to book value                      70.66%        81.96%        87.51%
Price to tangible
 book value                              86.60%       100.79%       104.99%


(1) Earnings Per Share calculations use average outstanding shares which
    include earned ESOP shares.

(2) Excludes a $1.234 million severence payout to Cape Bancorp's former CEO
    2009 1st QTR, & 2009 YTD





                             DELINQUENCY TABLE
                                (unaudited)

                         Delinquent Loan Summary

Period Ending:                                   12/31/2009
--------------                    ----------------------------------------
                                    Balances    % total loans   # Loans
             31-59                   3,205,196          0.40%           20
             60-89                   2,503,662          0.31%           11
               90+                  28,707,814          3.58%           86
                                  ------------
                                    34,416,672          4.29%

Non-Accrual Other                    4,540,114          0.57%           10
                                  ============  ============  ============
Total Delinquency:                  38,956,785          4.85%          127
                                  ------------                ------------

Total Loans Total:                               802,783,902
                                  ----------------------------------------


             Days                     CML            IL            ML
             -----
             31-59                     913,278       408,681     1,883,237
             60-89                     903,146        49,911     1,550,604
               90+                  24,975,069       482,137     3,250,608
                                  ------------
                                    26,791,493

Non-Accrual Other*                   4,540,114             -             -
                                  ============  ============  ============
Total Delinquency by Type           31,331,607       940,729     6,684,449
Total Loans by Type                506,364,068    48,879,352   247,540,482
% of Total Loans in Type                  6.19%         1.92%         2.70%

Total Delinquency                                 38,956,785
                                  ----------------------------------------


Period Ending:                                    9/30/2009
--------------                    ----------------------------------------
                                    Balances    % total loans   # Loans
             31-59                   2,277,136          0.28%           19
             60-89                   3,765,938          0.47%           21
               90+                  31,031,782          3.86%           85
                                  ------------
                                    37,074,856          4.61%

Non-Accrual Other                    5,297,987          0.66%           15
                                  ============  ============  ============
Total Delinquency:                  42,372,843          5.27%          140
                                  ------------                ------------

Total Loans Total:                               803,399,926
                                  ----------------------------------------  


             Days                     CML            IL            ML
             -----
             31-59                     986,732       635,924       654,480
             60-89                   2,497,843       377,240       890,856
               90+                  26,582,247       444,947     4,004,587
                                  ------------
                                    30,066,822

Non-Accrual Other*                   5,297,987             -             -
                                  ============  ============  ============
Total Delinquency by Type           35,364,809     1,458,110     5,549,924
Total Loans by Type                508,307,575    48,565,587   246,526,764
% of Total Loans in Type                  6.96%         3.00%         2.25%

Total Delinquency                                 42,372,843
                                  ----------------------------------------


Period Ending:                                   12/31/2008
--------------                    ----------------------------------------
                                    Balances    % total loans   # Loans
             31-59                   5,938,319          0.75%           47
             60-89                   6,277,807          0.79%            9
               90+                  21,047,651          2.65%           60

Non-Accrual Other
                                  ============  ============  ============
Total Delinquency:                  33,263,777          4.18%          116
                                  ------------                ------------

Total Loans Total:                               795,109,112
                                  ----------------------------------------


             Days                     CML            IL            ML
             -----
             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

Non-Accrual Other*
                                  ============  ============  ============
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
                                  ----------------------------------------


* Non-Accrual Other means loans that are less than 90 days past due or
  current for interest payments that are classified by management as
  non-performing and are accounted for on a cash basis.


Forward Looking Statements

This press release discusses primarily historical information. However, certain statements contained herein are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks, as described in our SEC filings, and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operated, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions, which may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

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.

Contact Information

  • For further information contact:
    Guy Hackney
    Chief Financial Officer
    Cape Bancorp
    (609) 465-5600