SOURCE: Cape Bancorp, Inc.

Cape Bancorp, Inc.

February 01, 2013 16:30 ET

Cape Bancorp, Inc. Reports Fourth Quarter and Annual 2012 Results

CAPE MAY COURT HOUSE, NJ--(Marketwire - Feb 1, 2013) - 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, 2012. 

For the quarter ended December 31, 2012, Cape Bancorp reported net income of $1.0 million, or $.08 per common and fully diluted share, and $5.1 million, or $.41 per common and fully diluted share, for the year ended December 31, 2012. This compares to a net loss of $2.0 million, or $.16 per common and fully diluted share for the fourth quarter of 2011, and net income of $8.0 million, or $.64 per common and fully diluted share for the year ended December 31, 2011. Included in the full year operating results for 2011 were tax benefits totaling $12.2 million representing the reversal of a portion of the deferred tax valuation allowance.

On November 28, 2012, the Board of Directors declared a cash dividend of $0.05 per common share to shareholders of record as of the close of business December 12, 2012. The dividend was paid on December 26, 2012.

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

"In 2012, Cape Bank was able to make advancements in several key areas. Both earnings and tangible capital grew on improving performance. Balance sheet restructuring improved NIM through a recasting of FHLB advances. Most importantly, management continued to reduce troubled credits ending the year with non-performing loans at 2.51% of total gross loans -- down from 3.77% the previous year. The Adversely Classified Assets ratio dropped to 30%, the best showing in three years. 

"Both the performance and the capital levels provided the confidence to reconsider the Bank's capital plans. As a result, the Board acknowledged the patience of our shareholders by declaring a $0.05 dividend. With the tangible equity to tangible assets ratio ending the year at 12.62%, the Board feels that additional strategies should be reviewed in 2013." 

The following are significant factors which contributed to the operating results of the comparative quarters and year-to-date:

  • The net interest margin was 3.77% for the fourth quarter ended December 31, 2012, an increase of 28 basis points from the quarter ended December 31, 2011. Average interest-earning assets declined $28.1 million for the quarter ended December 31, 2012 compared to the 2011 period while interest-bearing liabilities declined $45.8 million during the same period. The yield on interest-earning assets declined 18 basis points to 4.45% for the quarter ended December 31, 2012 compared to 4.63% for the same quarter a year ago, while the cost of interest-bearing liabilities declined 51 basis points to 0.80% for the quarter ended December 31, 2012 compared to 1.31% for the 2011 three month period. For the year ended December 31, 2012, the net interest margin was 3.75%, an increase of 15 basis points over the 3.60% for the year ended December 31, 2011. Average interest-earning assets declined $23.9 million for the year ended December 31, 2012 compared to the 2011 period while interest-bearing liabilities declined $33.6 million during the same period. The yield on interest-earning assets declined 17 basis points to 4.62% for the year ended December 31, 2012 compared to 4.79% for the year ended December 31, 2011, while the cost of interest-bearing liabilities declined 36 basis points to 1.01% for the year ended December 31, 2012 compared to 1.37% for the same period last year. Both the three and twelve month periods of 2012 benefited from the previously disclosed debt extinguishment in the second quarter of 2012, and the further restructuring of debt in the third quarter of 2012.

  • The loan loss provision for the fourth quarter of 2012 totaled $1.1 million compared to $4.5 million for the fourth quarter ended December 31, 2011. Loan charge-offs for the fourth quarter of 2012 totaled $3.5 million compared to charge-offs totaling $6.1 million for the quarter ended December 31, 2011. For the year ended December 31, 2012, the loan loss provision totaled $3.6 million compared to $19.6 million for the year ended December 31, 2011. Included in the $19.6 million loan loss provision in the prior year was $5.5 million related to the transfer of loans to the loans held for sale account. These loans were written-down to their estimated fair market value on the date of transfer. Loan charge-offs for the year ended December 31, 2012 were significantly lower and totaled $6.4 million compared to loan charge-offs and write-downs of $19.7 million for the year ended December 31, 2011.

  • Net gains on sales of investment securities totaled $641,000 for the fourth quarter ended December 31, 2012, compared to net losses of $18,000 for the quarter ended December 31, 2011. For the year ended December 31, 2012, net gains on sales of investment securities totaled $1.6 million compared to $149,000 for the year ended December 31, 2011.

  • Net gains on the sale of loans totaled $23,000 and $423,000 for the three and twelve months ended December 31, 2012, compared to net losses of $191,000 and $67,000 for the three and twelve months ended December 31, 2011, respectively.

  • The year ended December 31, 2012 included the recognition of a deferred gain related to the sale of bank premises of $425,000 compared to the initial $1.8 million gain recorded in the second quarter of 2011. The additional gain of $425,000 resulted from vacating leased space in the second quarter of 2012, which accelerated the recognition of a portion of the deferred gain.

  • The year ended December 31, 2012 included an other-than-temporary-impairment (OTTI) charge of $8,000 compared to an OTTI charge of $1.5 million for the year ended December 31, 2011. The fourth quarter of 2011 included an OTTI charge of $1.2 million. There was no OTTI related charge in the fourth quarter of 2012.

  • Included in the twelve month period of 2012 was a $350,000 gain on the sale of the Company's merchant card business.

  • Loan related expenses (real estate taxes, insurance, legal and other) totaled $574,000 for the fourth quarter ended December 31, 2012 compared to $729,000 for the same period in 2011. For the year ended December 31, 2012, loan related expenses totaled $2.1 million compared to $2.4 million for the year ended December 31, 2011.

  • Other Real Estate Owned (OREO) expenses were $497,000 for the fourth quarter ended December 31, 2012 compared to $1.4 million for the fourth quarter ended December 31, 2011. Included in these expenses were write-downs totaling $266,000 in the fourth quarter of 2012 and $1.1 million in the fourth quarter of 2011. For the year ended December 31, 2012, these expenses were $2.1 million compared to $2.5 million for the year ended December 31, 2011. Included in these expenses were write-downs totaling $1.1 million for the year ended December 31, 2012 compared to $1.8 million for the year ended December 31, 2011.

  • The quarter ended December 31, 2012 included net losses on OREO sales of $3,000 compared to net losses of $196,000 for the three months ended December 31, 2011. For the years ended December 31, 2012 and 2011, net losses on the sale of OREO totaled $260,000 and $218,000, respectively. OREO rental income totaled $294,000 for the year ended December 31, 2012 compared to $95,000 for the same period a year ago.

  • The year ended December 31, 2012 included a prepayment penalty of $921,000 related to the previously disclosed debt extinguishment in the second quarter of 2012.

  • For the quarter and year ended December 31, 2012, income tax expense was negatively impacted by approximately $300,000 of deferred tax asset valuation allowance related to the Cape Charitable Foundation.

Cape Bancorp's total assets at December 31, 2012 totaled $1.041 billion, a decrease of $29.8 million from the December 31, 2011 level of $1.071 million.

Total net loans decreased $1.1 million to $715.2 million at December 31, 2012, from $716.3 million at December 31, 2011. An increase in commercial loans was more than offset by decreases in mortgage and consumer loans. Mortgage loans decreased $16.5 million as a result of early pay-offs and the Bank selling approximately 54% of originations made during the year in an effort to manage interest rate risk. An increase in commercial loan activity within our market resulted in growth of $14.5 million. Consumer loans declined $1.7 million. The allowance for loan losses totaled $10.1 million, or 1.40% of gross loans and 55.53% of non-performing loans at December 31, 2012. The Company's Adversely Classified Asset ratio at December 31, 2012 was 30%, a significant improvement from 57% at December 31, 2011.

At December 31, 2012, the Company had $18.2 million in non-performing loans, or 2.51% of total gross loans, a significant decrease from 3.77% of total gross loans at December 31, 2011. Included in non-performing loans are troubled debt restructurings totaling $3.5 million at December 31, 2012 and $405,000 at December 31, 2011, respectively.

Other real estate owned (OREO) decreased $1.1 million from $8.3 million at December 31, 2011 to $7.2 million at December 31, 2012, and consisted at December 31, 2012 of thirteen commercial properties and thirty-five residential properties (including twenty-seven building lots). During the quarter ended December 31, 2012, the Company added two commercial properties and four residential properties to OREO with aggregate carrying values of $304,000 and $458,000, respectively. Three commercial OREO properties and four residential OREO properties with aggregate carrying values totaling $868,000 were sold during the quarter ended December 31, 2012 with recognized net losses of $3,000. For the year ended December 31, 2012, the Company sold thirteen residential OREO properties and fourteen commercial OREO properties with aggregate carrying values totaling $10.2 million with recognized net losses totaling $260,000. Currently, the Company has agreements of sale for eleven OREO properties with an aggregate carrying value totaling $3.1 million, all of which are expected to close in the first quarter 2013.

At December 31, 2012, Cape Bancorp's core deposits totaled $542.4 million which represented an increase of $61.9 million from the December 31, 2011 level of $480.5 million. Non-interest bearing deposits increased $11.7 million, NOW and money market accounts increased $42.0 million, and savings accounts increased $8.2 million. Certificates of deposit totaled $238.6 million, a decline of $50.5 million from December 31, 2011. At December 31, 2012, deposits totaled $784.6 million compared to $774.4 million at December 31, 2011, an increase of $10.2 million.

Cape Bancorp's total equity increased to $151.4 million at December 31, 2012 from $145.7 million at December 31, 2011, an increase of $5.7 million, or 3.88%. Tangible equity to tangible assets increased to 12.62% at December 31, 2012 compared to 11.72% at December 31, 2011. Cape Bank's regulatory capital ratios for Tier I Leverage Ratio, Tier I Risk-Based Capital and Total Risk-Based Capital are 10.43%, 14.20% and 15.46%, respectively, all of which exceed well capitalized status.

Cape Bancorp, Inc.  
                       
    Twelve Months Ended   Three Months Ended  
    December 31, 2012   December 31, 2011   December 31, 2012   September 30, 2012   December 31, 2011  
       
Statements of Income Data:                      
Interest income   $ 43,704   $ 46,467   $ 10,531   $ 10,949   $ 11,300  
Interest expense     8,204     11,611     1,617     1,897     2,782  
  Net interest income     35,500     34,856     8,914     9,052     8,518  
Provision for loan losses     3,638     19,607     1,087     710     4,534  
  Net interest income after provision for loan losses     31,862     15,249     7,827     8,342     3,984  
Non-interest income     7,814     5,311     1,978     1,601     (352 )
Non-interest expense     31,622     30,928     7,507     8,011     8,554  
Income (loss) before income taxes     8,054     (10,368 )   2,298     1,932     (4,922 )
Income tax expense (benefit)     2,947     (18,355 )   1,287     399     (2,882 )
Net income (loss)   $ 5,107   $ 7,987   $ 1,011   $ 1,533   $ (2,040 )
                                 
Basic Earnings (loss) per share1   $ 0.41   $ 0.64   $ 0.08   $ 0.12   $ (0.16 )
Basic Average shares outstanding     12,441,219     12,393,359     12,474,434     12,447,659     12,416,256  
Diluted Earnings (loss) per share1   $ 0.41   $ 0.64   $ 0.08   $ 0.12   $ (0.16 )
Diluted Average shares outstanding     12,443,298     12,398,178     12,475,574     12,451,333     12,416,256  
Shares outstanding     13,336,776     13,314,111     13,336,776     13,337,601     13,314,111  
                                 
Statements of Condition Data (Period End):                                
Investments   $ 170,857   $ 190,714   $ 170,857   $ 169,349   $ 190,714  
Loans, net of allowance   $ 715,219   $ 716,341   $ 715,219   $ 718,837   $ 716,341  
Allowance for loan losses   $ 10,122   $ 12,653   $ 10,122   $ 12,483   $ 12,653  
Total assets   $ 1,041,349   $ 1,071,128   $ 1,041,349   $ 1,043,307   $ 1,071,128  
Total deposits   $ 784,591   $ 774,403   $ 784,591   $ 753,655   $ 774,403  
Total borrowings   $ 97,965   $ 144,019   $ 97,965   $ 130,023   $ 144,019  
Total equity   $ 151,377   $ 145,719   $ 151,377   $ 150,993   $ 145,719  
                                 
Statements of Condition Data (Average Balance):                                
Total interest-earning assets   $ 945,489   $ 969,340   $ 940,535   $ 935,099   $ 968,613  
Total interest-bearing liabilities   $ 811,403   $ 845,003   $ 799,436   $ 794,832   $ 845,207  
                                 
Operating Ratios:                                
ROAA     0.49 %   0.75 %   0.39 %   0.59 %   -0.76 %
ROAE     3.42 %   5.61 %   2.66 %   4.09 %   -5.56 %
Yield on Earning Assets     4.62 %   4.79 %   4.45 %   4.66 %   4.63 %
Cost of Interest Bearing Liabilities     1.01 %   1.37 %   0.80 %   0.95 %   1.31 %
Net interest margin     3.75 %   3.60 %   3.77 %   3.85 %   3.49 %
Efficiency ratio     71.65 %   72.93 %   70.60 %   71.73 %   78.66 %
                                 
Capital Ratios:                                
Tier 1 Leverage Ratio     10.43 %   9.15 %   10.43 %   9.94 %   9.15 %
Tier 1 Risk-Based Capital Ratio     14.20 %   12.57 %   14.20 %   13.49 %   12.57 %
Total Risk-Based Capital Ratio     15.46 %   13.82 %   15.46 %   14.74 %   13.82 %
Tangible equity/tangible assets     12.62 %   11.72 %   12.62 %   12.56 %   11.72 %
Book value   $ 11.35   $ 10.94   $ 11.35   $ 11.32   $ 10.94  
Tangible book value   $ 9.64   $ 9.22   $ 9.64   $ 9.61   $ 9.22  
Stock price   $ 8.69   $ 7.85   $ 8.69   $ 9.36   $ 7.85  
Price to book value     76.56 %   71.76 %   76.56 %   82.69 %   71.76 %
Price to tangible book value     90.15 %   85.14 %   90.15 %   97.40 %   85.14 %
                                 
Quality Ratios:                                
Non-performing loans to total gross loans     2.51 %   3.77 %   2.51 %   2.47 %   3.77 %
Non-performing assets to total assets     2.50 %   3.38 %   2.50 %   2.51 %   3.38 %
Texas ratio     18.76 %   26.72 %   18.76 %   18.64 %   26.72 %
Allowance for loan losses to non-performing loans     55.53 %   46.10 %   55.53 %   69.13 %   46.10 %
Allowance for loan losses to total gross loans     1.40 %   1.74 %   1.40 %   1.71 %   1.74 %
Net charge-offs to average loans     0.85 %   2.02 %   1.89 %   0.49 %   3.28 %
                                 
1 Earnings Per Share calculations use average outstanding shares which include earned ESOP shares.
 
 
 
Cape Bancorp, Inc.
Delinquency Summary
 
 
 
Period Ending: 12/31/2012     9/30/2012     12/31/2011  
  Balances     % total loans     # Loans     Balances     % total loans     # Loans     Balances     % total loans     # Loans  
31-59 $ 638,991       0.09 %     7     $ 889,754       0.12 %     14     $ 2,111,666       0.29 %     17  
60-89   988,791       0.14 %     10       658,957       0.09 %     8       2,130,969       0.29 %     8  
90+   12,914,553       1.78 %     70       15,204,300       2.08 %     70       26,407,001       3.62 %     98  
    14,542,335       2.01 %     87       16,753,011       2.29 %     92       30,649,636       4.20 %     123  
Non-Accrual Other   5,313,543       0.73 %     15       2,853,525       0.39 %     7       1,041,958       0.15 %     4  
Total Delinquency and Non-Accrual $ 19,855,878       2.74 %     102     $ 19,606,536       2.68 %     99     $ 31,691,594       4.35 %     127  
Total Loans         $ 725,340,633                     $ 731,322,718                     $ 728,994,167          
                                                                       
Days   CML       IL       ML       CML       IL       ML       CML       IL       ML  
31-59 $ -     $ 106,781     $ 532,210     $ 4,325     $ 132,677     $ 752,752     $ -     $ 279,338     $ 1,832,328  
60-89   517,065       218,869       252,857       -       146,993       511,964       1,362,864       94,675       673,430  
90+   8,388,810       841,528       3,684,215       9,687,251       818,585       4,698,464       21,047,586       683,227       4,676,188  
    8,905,875       1,167,178       4,469,282       9,691,576       1,098,255       5,963,180       22,410,450       1,057,240       7,181,946  
Non-Accrual Other*   5,313,543                       2,853,525                       1,041,958                  
Total Delinquency by Type $ 14,219,418     $ 1,167,178     $ 4,469,282     $ 12,545,101     $ 1,098,255     $ 5,963,180     $ 23,452,408     $ 1,057,240     $ 7,181,946  
Total Loans by Type $ 442,014,635     $ 46,648,973     $ 236,677,025     $ 438,589,518     $ 47,108,626     $ 245,624,574     $ 427,483,454     $ 48,346,112     $ 253,164,601  
% of Total Loans in Type   3.22 %     2.50 %     1.89 %     2.86 %     2.33 %     2.43 %     5.49 %     2.19 %     2.84 %
Total Delinquency and Non-Accrual         $ 19,855,878       2.74 %           $ 19,606,536       2.68 %           $ 31,691,594       4.35 %
*Non-Accrual Other means loans that are less than 90 days past due, that are classified by management as non-performing.
NOTE: Excluded from the table above are $911,000 of commercial loans classified as Loans Held for Sale all of which are over 90 days delinquent.
 
 
 

For further information contact Michael D. Devlin, President and Chief Executive Officer or Guy Hackney, Chief Financial Officer, Cape Bancorp: (609) 465-5600.

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 filings listed below with the Securities and Exchange Commission.

 SEC Form Reported Period Date filed with SEC
  10K Year ended December 31, 2011 March 14, 2012
  10Q Quarter ended March 31, 2012 May 1, 2012
  10Q Quarter ended June 30, 2012 August 2, 2012
  10Q Quarter ended September 30, 2012 November 5, 2012

Contact Information

  • Michael D. Devlin
    President and Chief Executive Officer
    Guy Hackney
    Chief Financial Officer
    Cape Bancorp
    (609) 465-5600