Cape Cod Five - December 31, 2009 Financial Results
February 2, 2010
Annual financial performance was solid in a year of economic challenges
The Cape Cod Five Cents Savings Bank completed a year of very strong residential lending as well as deposit growth and Trust and Asset Management activity. The Bank reports that solid core earnings for the year ended December 31, 2009, enabled it to increase capital, add significantly to loan loss reserves and to absorb increased FDIC premiums. Net income in 2009 was after increased expenses of $4.0 million for loan loss reserves and $2.7 million for FDIC premiums.
The Bank's net income of $8.2 million for the year ended December 31, 2009 was 8.7% below the $9.0 million in net income reported for last year. In response to the most challenging economic environment in decades, the Bank recorded a loan loss provision for the year ended 2009 of $7.2 million, up from $3.2 million in 2008. This increased the loan loss reserve to $18.0 million or 1.32% of loans at December 31, 2009 up from $13.3 million or 0.96% of loans at December 31, 2008. The 2009 net income allowed the Bank's capital to grow to $182.4 million, a $7.9 million or 4.5% increase compared to December 31, 2008 maintaining the Bank's well capitalized position under all regulatory definitions.
Total assets ended the year at $1.92 billion, an increase of $137.2 million or 7.7% for the year ended December 31, 2009 as compared to December 31, 2008. Deposits grew to $1.66 billion at December 31, 2009, an increase of $152.5 million or 10.1% from December 31, 2008. The Bank completed a year of very strong residential loan activity closing $799.7 million in loans in the year ended December 31, 2009, for both its portfolio and the secondary market, a 96.6% increase in volume over 2008 and a record for the Bank. The Bank's gross loan portfolio of $1.36 billion contracted 1.3% compared to December 31, 2008. The decrease was caused by the $37.0 million or 4.3% decline in the residential portfolio due to the sale of historically low fixed rate loans into the secondary market. This decrease was only partially offset by growth in home equity loans (up 7.6%) and modest growth in commercial loan volume (up 2.4%).
Trust and Asset Management had $631.6 million in assets as of December 31, 2009, a 25.2% increase compared to December 31, 2008, reflective of an increase in new account activity, as people reassess their financial relationships, as well as asset appreciation resulting from the equity markets recovery.
Dorothy A. Savarese, President and CEO, noted: "2009 was an historic year filled with many challenges. Despite economic uncertainty, increasing unemployment, a roller-coaster financial marketplace, an increase in complex federal and state regulations and an unexpected FDIC special assessment, the Bank produced solid financial results and was able to use its core earnings to build up its reserves and maintain capital.
The Bank achieved a number of strategic objectives, including closing a record number of residential mortgage loans, increasing deposit market share, and growing trust assets under management.
Recent economic data point to stabilization, however the economy is far from a full recovery. Although we would have liked a better result, we will continue to be significantly impacted by external events as well as the desire by the Bank to effectively balance risk and reward with our mission to responsibly provide financial products to our customers."
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