Cape Bancorp, Inc. ("Cape Bancorp" or the "Company") (Nasdaq:CBNJ),
the parent company of Cape Bank (the "Bank"), announces its
operating results for the three and six months ended June 30, 2014.
For the quarter ended June 30, 2014, Cape Bancorp reported net
income of $2.0 million, or $0.19 per common and fully diluted
share, and $4.1 million, or $0.37 per common and fully diluted
share, for the six months ended June 30, 2014. This compares to net
income of $1.6 million, or $0.13 per common and fully diluted
share, for the second quarter of 2013, and $3.1 million, or $0.25
per common and fully diluted share, for the six months ended June
30, 2013.
On April 28, 2014, the Board of Directors declared a cash
dividend of $0.06 per common share to shareholders of record as of
the close of business May 12, 2014. The dividend was paid on May
26, 2014.
Michael D. Devlin, President and Chief Executive Officer of Cape
Bancorp and Cape Bank, provided the following statement:
"The quarterly results reflect continued stability in the Bank's
earnings and the lessening of troubled credits and their related
expenses. Earnings per share have been strengthening as earnings
are improving and the stock buyback program continues. The ratio of
non-performing assets to total assets has declined to 1.12% as we
have been successful in reducing OREO during 2014.
"While commercial loan closings have been good, loan growth was
modest, having been impacted by payoffs of troubled credits and our
declining residential mortgage portfolio. The commercial loan
pipeline has remained healthy with strong contributions from our
Cape May, Burlington County, and Radnor regional offices.
"The local economy is sending mixed signals. The well-publicized
closing of several casinos is a clear negative for the area. While
Cape Bank does not have exposure to casino properties, the loss of
jobs will hurt our primary markets. Somewhat offsetting this news
are indications that the seasonal businesses are having a banner
year with great weather, large crowds, and tourists showing a
willingness to spend money.
"At the mid-year mark, we are pleased with our progress and have
realized the benefits we had anticipated for 2014: fewer troubled
credits, reduced compensation expense, a reduction in data
processing costs, and a lower effective tax rate."
Cape Bancorp's total assets at June 30, 2014 totaled $1.092
billion, a decrease of $1.2 million from the December 31, 2013
level of $1.093 billion.
Total net loans decreased $3.8 million from $780.1 million at
December 31, 2013 to $776.3 million at June 30, 2014 resulting from
decreases in residential mortgage loans totaling $7.5 million and
consumer loans totaling $506,000, partially offset by an increase
of $4.5 million in commercial loans. The decline in residential
mortgage loans reflects the effect of the Company exiting the
residential mortgage loan origination business effective December
31, 2013. The allowance for loan losses increased $400,000 and
totaled 1.24% of gross loans at June 30, 2014, compared to 1.18% at
December 31, 2013. At June 30, 2014, the allowance for loan losses
totaled 122.66% of non-performing loans, compared to 127.05% at
December 31, 2013 and 69.34% at June 30, 2013. The Company's
adversely classified asset ratio at June 30, 2014 was 17%, compared
to 26% at December 31, 2013.
At June 30, 2014, the Company had $7.9 million in non-performing
loans, or 1.01% of total gross loans compared to 0.93% of total
gross loans at December 31, 2013 and 1.90% of total gross loans at
June 30, 2013. Included in non-performing loans are troubled debt
restructurings totaling $660,000 at June 30, 2014 and $881,000 at
December 31, 2013.
Investment securities totaled $174.5 million at June 30, 2014,
an increase of $8.2 million, or 4.92%, from the December 31, 2013
total of $166.3 million.
Other real estate owned ("OREO") decreased $3.1 million from
$7.4 million at December 31, 2013 to $4.3 million at June 30, 2014,
and consisted at June 30, 2014 of eight commercial properties and
ten residential properties (including five building lots). During
the quarter ended June 30, 2014, the Company added two residential
properties to OREO with an aggregate carrying value of $58,000. In
addition, during the quarter ended June 30, 2014, the Company sold
three commercial OREO properties and seven residential OREO
properties with an aggregate carrying value totaling $2.1 million
with recognized net losses on the sale of OREO totaling
$232,000.
Cape Bank continues to satisfy the requirements of the Home
Owners Loan Act – Qualified Thrift Lender test during each of the
first six months of 2014, maintaining at least 65% of its portfolio
assets in certain qualified thrift investments, as defined.
At June 30, 2014, Cape Bancorp's core deposits totaled $522.1
million which represented a decrease of $4.3 million, or 0.82%,
from the December 31, 2013 level of $526.4 million. Non-interest
bearing checking accounts increased $5.1 million while money market
deposit accounts decreased $5.5 million, interest-bearing checking
accounts decreased $2.6 million and savings accounts decreased $1.7
million. Certificates of deposit totaled $288.7 million, an
increase of $19.5 million, or 7.25%, from the December 31, 2013
total of $269.2 million. At June 30, 2014, deposits totaled
$813.2 million compared to $798.4 million at December 31, 2013, an
increase of $14.8 million, or 1.86%.
Cape Bancorp's total equity increased $253,000 to $140.7 million
at June 30, 2014 from $140.4 million at December 31, 2013 resulting
from a net increase of $2.6 million in retained earnings (earnings
less dividends declared), an improvement of $1.6 million in
the accumulated other comprehensive loss and increases in
paid-in-capital and unearned ESOP shares totaling
$463,000. These increases were offset by a $4.4 million
decrease related to the Company's stock repurchase program.
Tangible equity to tangible assets increased to 11.02% at June 30,
2014 compared to 10.99% at December 31, 2013. At June 30,
2014, Cape Bank's regulatory capital ratios for Tier I Leverage
Ratio, Tier I Risk-Based Capital and Total Risk-Based Capital were
9.49%, 13.01% and 14.26%, respectively, all of which exceed well
capitalized status.
The following are significant factors which contributed to the
operating results of the comparative quarters and year-to-date:
- The net interest margin was 3.59% for the three months ended
June 30, 2014 compared to 3.74% for the three months ended June 30,
2013, a decrease of 15 basis points. Average interest-earning
assets increased $56.9 million for the three months ended June 30,
2014 compared to the 2013 period while average interest-bearing
liabilities increased $64.6 million for the same period. The yield
on interest-earning assets declined 22 basis points to 4.10% for
the three months ended June 30, 2014 compared to 4.32% for the same
three month period a year ago, while the cost of interest-bearing
liabilities declined 9 basis points to 0.59% for the three months
ended June 30, 2014 compared to 0.68% for the 2013 three month
period. For the six months ended June 30, 2014, the net
interest margin was 3.65%, a decrease of 11 basis points from the
six months ended June 30, 2013. Average interest-earning
assets increased $62.4 million for the six months ended June 30,
2014 compared to the 2013 period while average interest-bearing
liabilities increased $70.2 million during the same
period. The yield on interest-earning assets declined 22 basis
points to 4.15% for the six months ended June 30, 2014 compared to
4.37% for the same six month period a year ago, while the cost of
interest-bearing liabilities declined 13 basis points to 0.58% for
the six months ended June 30, 2014 compared to 0.71% for the 2013
six month period.
- The loan loss provision for the three months ended June 30,
2014 totaled $115,000 compared to $313,000 for the three months
ended June 30, 2013. Loan charge-offs for the second quarter
of 2014 totaled $171,000 compared to $344,000 for the three months
ended June 30, 2013. The loan loss provision totaled $2.3
million and $610,000 for the six month periods ended June 30, 2014
and 2013, respectively. Loan charge-offs and write-downs on
loans transferred to held for sale totaled $2.2 million for the six
months ended June 30, 2014 compared to $841,000 for the six months
ended June 30, 2013.
- Net gains on the sale of loans totaled $129,000 for the three
months ended June 30, 2014, compared to $313,000 for the three
months ended June 30, 2013. Net gains on the sale of Small
Business Administration ("SBA") loans increased $46,000 while gains
on the sale of residential loans declined $230,000. For the
six months ended June 30, 2014, net gains on the sale of loans
totaled $245,000 compared to $583,000 for the six months ended June
30, 2013. Net gains on the sale of SBA loans increased
$137,000 while gains on the sale of residential loans declined
$475,000. The decline in gains on residential loans reflects
the Company's decision to exit the residential mortgage origination
business effective December 31, 2013.
- Net gains on sales of investment securities totaled $78,000 for
the three months ended June 30, 2014, compared to no gains for the
three months ended June 30, 2013. Net gains on sales of
investment securities totaled $2.0 million and $290,000 for the six
months ended June 30, 2014 and 2013, respectively. As
previously reported, in the first quarter of 2014 the Company sold
its remaining portion of collateralized debt obligation securities
("CDOs") with a book value of zero, resulting in a $1.9 million
gain.
- The three months ended June 30, 2014 included net losses on the
sale of OREO totaling $232,000 compared to net gains of $19,000 for
the three months ended June 30, 2013. The six months ended
June 30, 2014 included net losses on the sale of OREO totaling
$240,000 compared to net gains of $40,000 for the six months ended
June 30, 2013.
- Other operating income for the three months ended June 30, 2014
totaled $84,000, a decline of $11,000 from the three months ended
June 30, 2013. For the six months ended June 30, 2014, other
operating income totaled $336,000, an increase of $215,000 from the
six months ended June 30, 2013. The six months ended June 30, 2014
included life insurance proceeds totaling $195,000 from bank owned
life insurance. The six months ended June 30, 2013 included an
$83,000 write-down on an asset held for sale. In addition, the
three and six month periods of 2013 included fee income on loans
sold to correspondents of $45,000 and $82,000,
respectively. As a result of the Company's decision to exit
the residential mortgage origination business effective December
31, 2013, the 2014 three and six month periods do not include this
fee income.
- Salaries and employee benefits for the three and six months
ended June 30, 2014 totaled $3.4 million and $7.0 million
respectively, compared to $4.1 million and $8.0 million for the
three and six months ended June 30, 2013, respectively. The
decrease in both the quarter and year-to-date periods is primarily
attributable to reduced staffing levels related to the exiting of
the residential loan origination business and a reduction in
incentive based compensation programs.
- Loan related expenses (real estate taxes, insurance, legal and
other) totaled $253,000 for the three months ended June 30, 2014
compared to $393,000 for the same period in 2013. For the six
months ended June 30, 2014, loan related expenses totaled $478,000
compared to $734,000 for the six months ended June 30,
2013. The decline in loan related expenses corresponds to the
improvement in our asset quality metrics.
- OREO expenses totaled $416,000 for the six months ended June
30, 2014 compared to $479,000 for the six months ended June 30,
2013, a decline of $63,000. The 2013 period included higher
OREO write-downs.
- The three and six months ended June 30, 2014 reflects
reductions in equipment, data processing and telecommunications
expenses of $136,000 and $290,000, respectively, when compared to
the three and six months ended June 30, 2013. These reductions
result primarily from the cost savings associated with changing to
our new core processor in the fourth quarter of 2013.
- Other operating expenses declined $269,000 from $1.8 million
for the six months ended June 30, 2013 to $1.5 million for the six
months ended June 30, 2014, primarily resulting from a higher level
of consulting related expenses and expenses on loans sold to
correspondents in the 2013 period.
CAPE BANCORP
CONSOLIDATED |
SELECTED FINANCIAL
DATA |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended |
Three Months
Ended |
|
|
6/30/2014 |
|
6/30/2013 |
|
6/30/2014 |
|
3/31/2014 |
|
6/30/2013 |
|
(dollars in thousands, except
per share data) |
Statements of Income
Data: |
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
20,468 |
$ |
20,201 |
$ |
10,169 |
$ |
10,299 |
$ |
10,093 |
Interest expense |
|
2,472 |
|
2,791 |
|
1,270 |
|
1,202 |
|
1,342 |
Net interest income |
|
17,996 |
|
17,410 |
|
8,899 |
|
9,097 |
|
8,751 |
Provision for loan losses |
|
2,327 |
|
610 |
|
115 |
|
2,212 |
|
313 |
Net interest income after
provision for loan losses |
|
15,669 |
|
16,800 |
|
8,784 |
|
6,885 |
|
8,438 |
Non-interest income |
|
4,131 |
|
3,298 |
|
1,003 |
|
3,128 |
|
1,603 |
Non-interest expense |
|
13,238 |
|
15,028 |
|
6,502 |
|
6,736 |
|
7,455 |
Income (loss) before income taxes |
|
6,562 |
|
5,070 |
|
3,285 |
|
3,277 |
|
2,586 |
Income tax expense (benefit) |
|
2,502 |
|
1,975 |
|
1,253 |
|
1,249 |
|
1,006 |
Net income (loss) |
$ |
4,060 |
$ |
3,095 |
$ |
2,032 |
$ |
2,028 |
$ |
1,580 |
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings (loss) per share(1) |
$ |
0.37 |
$ |
0.25 |
$ |
0.19 |
$ |
0.18 |
$ |
0.13 |
Basic Average shares outstanding |
|
10,978,897 |
|
12,390,837 |
|
10,955,918 |
|
11,157,234 |
|
12,287,513 |
Diluted Earnings (loss) per share(1) |
$ |
0.37 |
$ |
0.25 |
$ |
0.19 |
$ |
0.18 |
$ |
0.13 |
Diluted Average shares outstanding |
|
11,114,150 |
|
12,425,116 |
|
11,097,564 |
|
11,286,022 |
|
12,321,791 |
Shares outstanding |
|
11,631,926 |
|
12,853,615 |
|
11,631,926 |
|
11,881,985 |
|
12,853,615 |
|
|
|
|
|
|
|
|
|
|
|
Statements of Condition Data (Period
End): |
|
|
|
|
|
|
|
|
|
|
Investments |
$ |
174,454 |
$ |
166,965 |
$ |
174,454 |
$ |
172,725 |
$ |
166,965 |
Loans, net of allowance |
$ |
776,285 |
$ |
733,721 |
$ |
776,285 |
$ |
772,553 |
$ |
733,721 |
Allowance for loan losses |
$ |
9,730 |
$ |
9,786 |
$ |
9,730 |
$ |
9,736 |
$ |
9,786 |
Total assets |
$ |
1,091,723 |
$ |
1,050,540 |
$ |
1,091,723 |
$ |
1,091,051 |
$ |
1,050,540 |
Total deposits |
$ |
813,248 |
$ |
795,082 |
$ |
813,248 |
$ |
801,988 |
$ |
795,082 |
Total borrowings |
$ |
128,531 |
$ |
103,942 |
$ |
128,531 |
$ |
139,481 |
$ |
103,942 |
Total equity |
$ |
140,680 |
$ |
145,627 |
$ |
140,680 |
$ |
141,097 |
$ |
145,627 |
|
|
|
|
|
|
|
|
|
|
|
Statements of Condition Data (Average
Balance): |
|
|
|
|
|
|
|
|
|
|
Total interest-earning assets |
$ |
994,993 |
$ |
932,599 |
$ |
994,309 |
$ |
995,684 |
$ |
937,386 |
Total interest-bearing liabilities |
$ |
859,186 |
$ |
788,942 |
$ |
856,448 |
$ |
861,954 |
$ |
791,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Ratios: |
|
|
|
|
|
|
|
|
|
|
ROAA |
|
0.75% |
|
0.60% |
|
0.75% |
|
0.75% |
|
0.61% |
ROAE |
|
5.77% |
|
4.14% |
|
5.76% |
|
5.78% |
|
4.22% |
Yield on Earning Assets |
|
4.15% |
|
4.37% |
|
4.10% |
|
4.19% |
|
4.32% |
Cost of Interest Bearing Liabilities |
|
0.58% |
|
0.71% |
|
0.59% |
|
0.57% |
|
0.68% |
Net Interest Margin |
|
3.65% |
|
3.76% |
|
3.59% |
|
3.71% |
|
3.74% |
Efficiency Ratio |
|
65.06% |
|
72.61% |
|
64.63% |
|
65.49% |
|
72.06% |
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
Tier 1 Leverage Ratio |
|
9.49% |
|
10.12% |
|
9.49% |
|
9.56% |
|
10.12% |
Tier 1 Risk-Based Capital Ratio |
|
13.01% |
|
13.72% |
|
13.01% |
|
13.16% |
|
13.72% |
Total Risk-Based Capital Ratio |
|
14.26% |
|
14.97% |
|
14.26% |
|
14.41% |
|
14.97% |
Tangible Equity/tangible assets |
|
11.02% |
|
11.95% |
|
11.02% |
|
11.07% |
|
11.95% |
Book Value |
$ |
12.09 |
$ |
11.33 |
$ |
12.09 |
$ |
11.87 |
$ |
11.33 |
Tangible Book Value |
$ |
10.13 |
$ |
9.55 |
$ |
10.13 |
$ |
9.95 |
$ |
9.55 |
Stock Price |
$ |
10.73 |
$ |
9.50 |
$ |
10.73 |
$ |
11.00 |
$ |
9.50 |
Price to Book Value |
|
88.75% |
|
83.85% |
|
88.75% |
|
92.67% |
|
83.85% |
Price to Tangible Book Value |
|
105.92% |
|
99.48% |
|
105.92% |
|
110.55% |
|
99.48% |
|
|
|
|
|
|
|
|
|
|
|
Quality Ratios: |
|
|
|
|
|
|
|
|
|
|
Non-Performing Loans to Total Gross
Loans |
|
1.01% |
|
1.90% |
|
1.01% |
|
0.99% |
|
1.90% |
Non-Performing Assets to Total Assets |
|
1.12% |
|
2.09% |
|
1.12% |
|
1.31% |
|
2.09% |
Allowance for Loan Losses to Non-Performing
Loans |
|
122.66% |
|
69.34% |
|
122.66% |
|
125.62% |
|
69.34% |
Allowance for Loan Losses to Total Gross
Loans |
|
1.24% |
|
1.32% |
|
1.24% |
|
1.24% |
|
1.32% |
Net Charge-Offs to Average Loans |
|
0.49% |
|
0.19% |
|
0.06% |
|
0.93% |
|
0.11% |
|
(1) Earnings Per Share
calculations use average outstanding shares which include earned
ESOP shares. |
|
Cape Bancorp,
Inc. |
Delinquency
Summary |
|
|
Period Ending: |
6/30/2014 |
12/31/2013 |
6/30/2013 |
|
Balances |
% total
loans |
#
Loans |
Balances |
% total
loans |
#
Loans |
Balances |
% total
loans |
#
Loans |
31-59 |
$ |
1,804,731 |
|
0.23% |
|
21 |
$ |
895,851 |
|
0.11% |
|
14 |
$ |
1,183,682 |
|
0.16% |
|
7 |
60-89 |
|
1,947,624 |
|
0.25% |
|
8 |
|
2,059,965 |
|
0.26% |
|
13 |
|
469,075 |
|
0.06% |
|
4 |
90+ |
|
7,392,476 |
|
0.94% |
|
38 |
|
6,674,454 |
|
0.85% |
|
32 |
|
11,540,856 |
|
1.55% |
|
53 |
|
|
11,144,831 |
|
1.42% |
|
67 |
|
9,630,270 |
|
1.22% |
|
59 |
|
13,193,593 |
|
1.77% |
|
64 |
Non-Accrual Other |
|
539,832 |
|
0.07% |
|
3 |
|
668,887 |
|
0.08% |
|
4 |
|
2,571,456 |
|
0.35% |
|
13 |
Total Delinquency and
Non-Accrual |
$ |
11,684,663 |
|
1.49% |
|
70 |
$ |
10,299,157 |
|
1.30% |
|
63 |
$ |
15,765,049 |
|
2.12% |
|
77 |
Total Loans |
|
|
$ |
786,014,526 |
|
|
|
|
$ |
789,456,784 |
|
|
|
|
$ |
743,507,357 |
|
|
|
|
|
|
|
|
Days |
CML |
IL |
ML |
CML |
IL |
ML |
CML |
IL |
ML |
31-59 |
$ |
-- |
$ |
546,155 |
$ |
1,258,576 |
$ |
-- |
$ |
392,251 |
$ |
503,600 |
$ |
437,447 |
$ |
-- |
$ |
746,215 |
60-89 |
|
994,019 |
|
74,559 |
|
879,046 |
|
1,272,553 |
|
198,635 |
|
588,777 |
|
-- |
|
118,367 |
|
350,708 |
90+ |
|
5,893,016 |
|
574,938 |
|
924,522 |
|
5,058,420 |
|
461,223 |
|
1,154,811 |
|
8,717,440 |
|
921,461 |
|
1,901,955 |
|
|
6,887,035 |
|
1,195,652 |
|
3,062,144 |
|
6,330,973 |
|
1,052,109 |
|
2,247,188 |
|
9,154,887 |
|
1,039,828 |
|
2,998,878 |
Non-Accrual Other* |
|
539,832 |
|
|
|
|
|
668,887 |
|
|
|
|
|
2,571,456 |
|
|
|
|
Total Delinquency by Type |
$ |
7,426,867 |
$ |
1,195,652 |
$ |
3,062,144 |
$ |
6,999,860 |
$ |
1,052,109 |
$ |
2,247,188 |
$ |
11,726,343 |
$ |
1,039,828 |
$ |
2,998,878 |
Total Loans by Type |
$ |
490,050,755 |
$ |
44,009,925 |
$ |
251,953,846 |
$ |
485,522,298 |
$ |
44,515,475 |
$ |
259,419,011 |
$ |
456,637,155 |
$ |
43,929,293 |
$ |
242,940,909 |
% of Total Loans in Type |
|
1.52% |
|
2.72% |
|
1.22% |
|
1.44% |
|
2.36% |
|
0.87% |
|
2.57% |
|
2.37% |
|
1.23% |
Total Delinquency and
Non-Accrual |
|
|
$ |
11,684,663 |
|
1.49% |
|
|
$ |
10,299,157 |
|
1.30% |
|
|
$ |
15,765,049 |
|
2.12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 $825,000 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, 2013 |
March 11, 2014 |
10Q |
Quarter ended March 31, 2014 |
May 7, 2014 |
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