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Cape Cod Five - December 31, 2008 Financial Results

February 1, 2009

Stable earnings enable Bank to grow capital and reserves

The Cape Cod Five Cents Savings Bank reports that for the twelve months ending December 31, 2008 the Bank delivered solid financial performance.  The Bank's net income of $9.0 million for the twelve months ended December 31, 2008 was down marginally from the prior year.  The stable earnings enabled the Bank's capital to grow to $174.5 million, a 6.0% increase compared to December 31, 2007.  The Bank continues to be well capitalized under the regulatory definitions.

The 1.4% decrease in net income to $9.0 million was a result of increases in net interest income and non-interest income for the year being offset by increases in non-interest expense and the loan loss provision.  The loan loss provision for the twelve month period was $3.2 million as the Bank increased the loan loss reserve to over $13.3 million based on management's assessment of its loan portfolio quality in light of current and anticipated ongoing economic weakness.

Total assets increased $123.6 million to end the period at $1.78 billion, up 7.5% from December 31, 2007.  Deposits grew to $1.51 billion at December 31, 2008, an increase of $97.8 million or 6.9% from  December 31, 2007.  On the loan side, the Bank experienced strong loan growth in 2008 with net loans increasing $78.4 million to $1.37 billion. Commercial loans grew 11.0% to $386.0 million. In the residential lending area, the Bank continued to be an active lender closing $407.2 million in loans during the twelve months of 2008, for both its portfolio and the secondary market, representing a 16.4% increase in volume over the same period in 2007.  Trust and Asset Management had $504.3 million in assets under management as of December 31, 2008, a 2.7% decrease compared to December 31, 2007, which is reflective of the difficult market environment of the past several months.  Trust and Asset Management earned $3.1 million in total revenue for the year of 2008.

Dorothy A. Savarese, President and CEO, noted: "As we all know, 2008 was a challenging and tumultuous year for most of the world.  At the Cape Cod Five, we worked hard to adapt to the changed financial environment, prepare for the future, and build our capital and reserves."