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Cape Cod Five - March 31, 2010 Financial Results

Strong earnings, increased reserve for loan loss coverage and solid capital ratios

Net income results of $3.0 million for the quarter period ended March 31, 2010 exceeded last year’s comparable quarterly results of $1.6 million by 81.6%. Return on average assets for the quarter ended March 31, 2010 was 64 basis points, a solid improvement when compared with the 37 basis points recorded in the comparable prior year period. Increases in net interest and non interest income coupled with decreases in operating expenses and loan loss provision led to the solid improvement in year-over-year net income. The quarterly loan loss provision of $1.5 million was down from last year’s level of $2.3 million however, it remains at a high level given ongoing economic uncertainties and management’s assessment of the possibility of future losses in its loan portfolio. The Bank has increased its loan loss reserve to $19.0 million and provides for a gross loan coverage ratio of 1.38%, up from 1.08% a year ago March 31, 2009.

At March 31, 2010, The Cape Cod Five Cents Savings Bank’s total assets of $1.91 billion decreased modestly by $3.9 million or 0.2% for the quarter. Net total loans increased from $1.34 billion to $1.36 billion during the quarter. Maintaining its commitment to lending to credit-worthy businesses on Cape Cod, the commercial and industrial and commercial mortgage loan portfolios increased $12.6 million or 3.2% from $395.2 million to $407.8 million during the quarter. Continuing its role as the leading mortgage lender on the Cape, the Bank closed $133.1 million in residential mortgage loans during the three months ended March 31, 2010, for both its portfolio and the secondary market. Deposits declined to $1.64 billion as of March 31, 2010, a decrease of $14.5 million or 0.9% from December 31, 2009. The most recent FDIC statistics show that the Bank holds the dominant deposit market share position on Cape Cod. Bank capital has grown to $185.4 million at March 31, 2010, increasing from $182.4 million at December 31, 2009. The Bank continues to be categorized as well capitalized under all quantitative regulatory definitions. 

Trust and Asset Management had $647.9 million in total assets as of March 31, 2010, up 2.6% and 31.1% when compared to December 31, 2009 and March 31, 2009, respectively, reflective of the addition of new clients and the recovering market environment over the measured periods. Trust and Asset Management earned $1.1 million in total revenue for the three months ended March 31, 2010, up 45.6% from the $0.8 million in the comparable period last year.

Dorothy A. Savarese, President and CEO, noted: “We are quite pleased with these results and they make it possible for us to continue to add to our capital and reserves. As always, we appreciate the confidence that our customers and the Cape Cod and Islands communities place in us, a locally managed, conservative community bank.”