Cape Cod Five - June 30, 2009 Financial Results
Core earnings help Bank increase reserves and capital.
The Cape Cod Five Cents Savings Bank reports that for the six months ending June 30, 2009 it delivered solid core earnings that enabled it to be profitable while adding significantly to loan loss reserves and absorbing increased FDIC premiums. The Bank's net income of $3.2 million for the six months ended June 30, 2009 was down 32.1% compared to the $4.8 million in net income for the comparable period last year, but the first six months of 2009 results are after increased expense of $3.8 million for loan loss reserves and $2.1 million in increased FDIC premiums. The strong core earnings enabled the Bank's capital to grow to $177.4 million, an $8.3 million and 4.9% increase compared to June 30, 2008. The Bank continues to be well capitalized under the regulatory definitions.
The loan loss provision for the six month period was $4.3 million as the Bank increased the loan loss reserve to over $15.7 million or 1.15% of loans up from 0.86% at June 30, 2008.
The Bank reports that total assets increased $176.1 million for the twelve months ended June 30, 2009 to end the period at $1.92 billion, up 10.1% compared to June 30, 2008. Deposits grew to $1.65 billion as of June 30, 2009, an increase of $182.8 million or 12.5% from June 30, 2008. The Bank continues to experience solid net loan growth on the home equity (up 17.1%) and commercial (up 7.7%) side, while the residential portfolio (down 1.7%) shrunk slightly as more customers elected to refinance to fixed rate loans sold into the secondary market. As a result, net total loans ended the quarter at $1.35 billion, up 2.2% compared to June 30, 2008. The residential lending area closed $475.4 million in loans during the six months ended June 30, 2009, for both its portfolio and the secondary market, representing a 120% increase in volume over the same period in 2008.
Trust and Asset Management had $555.5 million in assets as of June 30, 2009, an 8.2% increase compared to June 30, 2008, which is reflective of new account and asset growth as people reassess their financial relationships in this challenging market environment. The Trust and Asset Management Department earned $1.6 million in total revenue for the six months ended June 30, 2009, up 7.3% from the comparable period last year.
Dorothy A. Savarese, President and CEO, noted: "Overall, we are quite pleased with our financial results and the ability of our earnings to add to our reserves and capital. As we reflect on the first half of 2009, the impacts of the eighteen month economic recession continue. While we have seen some signs of stabilization with improvements in the credit markets and stock market gains from the lows of earlier this year, spending remains constrained and unemployment continues to increase.
Although we cannot predict what the balance of the year will hold, it has become clear that we live in a changed economic world. The ongoing strain in the economy may make it difficult for more people to keep up with their bills. For these reasons, we will continue to increase our reserves. We feel privileged that in these times there is a growing recognition of the value of doing business with a locally managed community bank and are proud of the continuing success of our business lines in serving our customers on Cape Cod."
Equal Housing Lender.
Member 
