and 50% of these cost savings being phased in during the fourth quarter of 2004. The Company believes that the aggregate annual cost savings of 25% of Hawthorne’s projected general and administrative expenses will be achieved. There were no branch closings and core data processing system conversions are anticipated to occur in October 2004. The Company stated at the time the merger was announced that the Company was not factoring in any revenue enhancements, however revenue enhancements are being realized, including the balance sheet restructuring which unwound a wholesale leverage position consisting of approximately $330 million of securities and borrowings on the balance sheet at a negative spread. The Company anticipates that 2004 earnings accretion will exceed earlier estimates provided in its January 2004 announcement of the Hawthorne acquisition.
As a result of the acquisition of Hawthorne, the Company incurred $420,000 of merger related costs during the second quarter of 2004, due to the cancellation of its data processing contracts and to record retention bonuses for certain Hawthorne employees during the transition.
The Company’s net interest income increased 129% and 103% to $22.9 million and $36.7 million for the three and six-month periods ended June 30, 2004, respectively, from $10.0 million and $18.1 million for the three and six-month periods ended June 30, 2003, respectively. The Company’s net interest margin increased 37 basis points to 3.51% for the second quarter of 2004, compared to 3.14% for the first quarter of 2004. The Company’s net interest spread increased 38 basis points to 3.41% for the second quarter of 2004, compared to 3.03% for the first quarter of 2004. Excluding the net effect of the amortization or accretion of premiums or discounts resulting from the purchase accounting adjustments due to the Hawthorne acquisition, the Company’s net interest margin would have been 3.32% during the second quarter of 2004, an increase of 18 basis points compared to 3.14% for the first quarter of 2004 and the Company’s net interest spread would have been 3.21% during the second quarter of 2004, an increase of 18 basis points compared to 3.03% for the first quarter of 2004.
The Company’s yield on interest earning assets increased 24 basis points to 5.16% for the second quarter ended June 30, 2004, compared to 4.92% for the first quarter ended March 31, 2004. The Company’s yield on total loans increased 8 basis points to 5.44% for the second quarter ended June 30, 2004, compared to 5.36% for the first quarter ended March 31, 2004. The Company’s cost of interest bearing liabilities decreased 14 basis points to 1.75% for the second quarter ended June 30, 2004, compared to 1.89%, for the first quarter ended March 31, 2004. The Company’s cost of funds, which includes the effect of noninterest bearing deposits, decreased 14 basis points to 1.71% for the second quarter ended June 30, 2004, compared to 1.85% for the first quarter ended March 31, 2004.
During the second quarter of 2004, the Company continued to take proactive steps to manage its net interest margin and interest rate risk position in anticipation of higher market rates of interest. During the quarter, the Company prepaid $214 million of shorter duration, fixed rate FHLB borrowings and subsequently extended duration. The Company incurred a penalty of $1.2 million on the prepayment of FHLB borrowings. As noted, in connection with the closing of the Company’s acquisition of Hawthorne, the Company sold $331.1 million of lower yielding mortgage-backed securities that were carried on Hawthorne’s books at a yield of 3.70% and prepaid $331.0 million of higher costing FHLB advances that were carried on Hawthorne’s books at a weighted average interest cost of 4.53%, thereby unwinding a wholesale leverage position that was on Hawthorne’s books at a negative spread. Additionally, the Company securitized approximately $27 million of Hawthorne’s single family residential loans and subsequently sold them, resulting in a gain on sale of securities of $1.2 million. The majority of the loans securitized and sold were longer duration fixed rate assets. The combined effect of these strategies are anticipated to result in higher net interest income, higher net interest margin and a more asset sensitive balance sheet going forward.
Noninterest income totaled $3.0 million for the quarters ended June 30, 2004, and June 30, 2003. In late June 2004, the Company securitized and subsequently sold $27 million of single family loans that had been originated by Hawthorne, resulting in a gain of $1.2 million. Recurring loan and retail banking fee income for the second quarter of 2004 increased 211% to $1.2 million, compared to $383,000 for the second quarter of 2003, and offset the decline in income from gains on sales of loans and securities during the second quarter of 2004, compared to the second quarter of 2003. Noninterest income decreased 23% to $4.8 million for the six-month period ended June 30, 2004, compared to $6.2 million for the six-month period ended June 30, 2003. The Company’s noninterest income included gains on
sales of loans and securities of $2.3 million for the six-month period ended June 30, 2004, compared to $4.7 million for the six-month period ended June 30, 2003.
NONINTEREST EXPENSES
The Company’s efficiency ratio decreased to 25.34% and 25.53% for the three and six-month periods ended June 30, 2004, respectively, compared to 29.18% and 29.60% for the three and six-month periods ended June 30, 2003, respectively. General and administrative expenses decreased to 0.94% and 0.92% of total average assets for the three and six-month periods ended June 30, 2004, respectively, compared to 1.21% and 1.28% for the three and six-month periods ended June 30, 2003, respectively.
The Company’s general and administrative expenses totaled $6.5 million and $10.6 million for the three and six-month periods ended June 30, 2004, respectively, compared to $3.8 million and $7.2 million for the three and six-month periods ended June 30, 2003, respectively. The increase during the three-month period ended June 30, 2004 compared to the three-month period ended June 30, 2003 is primarily due to higher personnel and operational costs, including occupancy, marketing and insurance costs related to the additional operations from the acquisition of Hawthorne. The Company recorded $1.2 million in costs associated with the early extinguishment of FHLB advances for the three and six-month periods ended June 30, 2004, compared to $771,000 and $923,000 for the three and six-month periods ended June 30, 2003, respectively. The Company recorded $58,000 of amortization of the core deposit intangible for the three-month period ended June 30, 2004, as a result of the acquisition of Hawthorne after the close of business on June 4, 2004.
INCOME TAXES
The Company’s effective tax rate was 39.42% and 39.13% for the three and six-month periods ended June 30, 2004, respectively, compared to 39.93% and 40.20% for the three and six-month periods ended June 30, 2003, respectively.
BALANCE SHEET AND CAPITAL
The Company had total consolidated assets of $4.74 billion at June 30, 2004, an increase of 142% and 236% from $1.96 billion and $1.41 billion at March 31, 2004 and June 30, 2003, respectively. Total loans, which include loans held for investment and loans held for sale, net of allowances, totaled $3.65 billion, an increase of 204% and 385% from $1.20 billion and $751.8 million at March 31, 2004 and June 30, 2003, respectively.
At June 30, 2004, 46% of the Company’s loans held for investment are tied to an index that adjusts each month or mature within one month. In addition, 63% of the Company’s loans held for investment have interest rates scheduled to reset within six months or mature within six months and 67% reset or mature within one year from June 30, 2004. The Company’s total loan portfolio had a weighted average duration to reset or maturity of approximately 14 months at June 30, 2004, representing a significant decrease from 21 months at March 31, 2004, thereby creating a greater degree of asset sensitivity at June 30, 2004.
The Company’s securities portfolio totaled $499.8 million at June 30, 2004, a decrease of 1% and 14% from $506.8 million and $581.2 million at March 31, 2004 and June 30, 2003, respectively. Mortgage-backed securities were 11% of total assets at June 30, 2004, well below industry peers, and well below the Company’s historic levels, which were 26% and 41% at March 31, 2004 and June 30, 2003, respectively. As part of the previously announced balance sheet restructuring of the Hawthorne balance sheet, at the close of the acquisition, the Company sold $331.1 million of mortgage-backed securities, which amounted to the entire securities portfolio acquired from Hawthorne. The Company continues to reinvest cash flows received from the securities portfolio into the Company’s higher yielding, adjustable rate loans, positioning the Company to benefit from anticipated higher market interest rates.
The Company’s deposits totaled $2.44 billion at June 30, 2004, an increase of 232% and 361% from $736.3 million and $529.6 million at March 31, 2004 and June 30, 2003, respectively. Transaction account deposits totaled $1.22 billion at June 30, 2004, an increase of 153% and 317% from $481.7 million and $292.0 million at March 31, 2004 and June 30, 2003, respectively. Of the Company’s transaction account deposits at June 30, 2004, the majority was from Los Angeles, Orange, Riverside, and San Diego counties, with business deposits accounting for $236.7 million of the total. The Company’s time deposits totaled $1.23 billion at June 30, 2004, compared $254.6 million and $237.6 million at March 31, 2004 and June 30, 2003, respectively. The deposit franchise consisted of approximately 71,000
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accounts, at June 30, 2004, served by 20 banking offices with an average of $122 million in deposits per branch. The Company’s approximately 52,000 transaction accounts had an average balance of approximately $23,000. The Company’s approximately 19,000 time deposit accounts had an average balance of approximately $63,000.
Borrowings totaled $1.69 billion at June 30, 2004, an increase of 54% and 120% from $1.10 billion and $765.5 million at March 31, 2004 and June 30, 2003, respectively. FHLB advances totaled $1.55 billion at June 30, 2004, an increase of 60% and 156% from $970.5 million and $606.7 million at March 31, 2004 and June 30, 2003, respectively. FHLB borrowings with maturities of greater than one year and less than 6.5 years totaled $967 million, at June 30, 2004. Repurchase agreements declined to a balance of zero at June 30, 2004, from $58.5 million and $68.8 million at March 31, 2004 and June 30, 2003, respectively. During the second quarter of 2004, the Company received net proceeds of $15.0 million from the issuance of trust preferred securities through unconsolidated trust subsidiaries, the proceeds of which are to be used for general corporate purposes, including the repurchase of the Company’s common stock. At June 30, 2004, the Company’s junior subordinated debt issued to its unconsolidated trust subsidiaries totaled $135.4 million, compared to $64.4 million at March 31, 2004, and $35.0 million at June 30, 2003, reflecting the additional issuance by the Company during the second quarter of 2004 and the debt assumed through the acquisition of Hawthorne.
Stockholders’ equity totaled $582.8 million at June 30, 2004, an increase of 412% and 538% from $113.8 million and $91.3 million at March 31, 2004, and June 30, 2003, respectively. Tangible stockholders’ equity totaled $219.1 million, an increase of 118% and 180% from $100.7 million and $78.3 million at March 31, 2004, and June 30, 2003, respectively. The Company’s equity to assets and tangible equity to assets were 12.29% and 4.62% at June 30, 2004, respectively, compared to 5.81% and 5.14% at March 31, 2004, respectively, and compared to 6.47% and 5.55% at June 30, 2003, respectively. The Company’s tangible equity to tangible assets ratio was 5.00% at June 30, 2004, compared to 5.17% and 5.60% at March 31, 2004 and June 30, 2003, respectively. Capital ratios at June 30, 2004 were higher than the December 31, 2003 proforma combined capital ratios that the Company indicated in its announcement of the Hawthorne acquisition in January 2004. The Company issued 23,484,930 shares in relation to the acquisition of Hawthorne. The acquisition of Hawthorne created $344.3 million of goodwill and a core deposit intangible of $6.4 million. The core deposit intangible will be amortized over ten years. The Company also exchanged 1,009,850 options and 949,319 warrants for Hawthorne’s stock for options and warrants consistent with the exchange ratio provided to Hawthorne’s shareholders in the Hawthorne acquisition. Book value per share totaled $10.97, an increase of 190% and 252% from $3.78 and $3.12 at March 31, 2004, and June 30, 2003, respectively. Tangible book value per share totaled $4.13, an increase of 23% and 55% from $3.35 and $2.67 at March 31, 2004, and June 30, 2003, respectively. In addition, the capital ratios of Commercial Capital Bank continued to exceed federal regulatory requirements for classification as a “well-capitalized” institution, the highest regulatory standard. The Bank’s core, tier one risk-based and total risk-based capital ratios are estimated to be 7.58%, 10.36% and 11.50% at June 30, 2004, respectively.
LOAN ORIGINATIONS
The Company’s core loan originations were a record $418.9 million during the second quarter of 2004, an increase of 82% and 128% from $230.1 million and $183.7 million, for the first quarter of 2004 and second quarter of 2003, respectively. The Company’s total loan originations, which include loans that were funded through the Company’s strategic alliance with Greystone Servicing Corporation, a Fannie Mae DUS lender, and the Company’s other broker and conduit channels totaled $466.7 million during the second quarter of 2004, an increase of 80% and 125% from $259.4 million and $207.1 million for the first quarter of 2004 and second quarter of 2003, respectively. The Company’s total loan originations increased 53% to a record $726.1 million during the six-month period ended June 30, 2004, from $474.1 million for the six-month period ended June 30, 2003. The value of loans in the Company’s core loan pipeline totaled a record $439 million at June 30, 2004, compared to $243 million and $182 million at March 31, 2004 and June 30, 2003, respectively. The value of loans in the Company’s total loan pipeline equaled a record $470 million at June 30, 2004, compared to $297 million and $194 million at March 31, 2004 and June 30, 2003, respectively. The Company is one of California’s few statewide income property lending franchises.
PORTFOLIO ASSET QUALITY
The Company’s total loans increased 208% to $3.70 billion at June 30, 2004, from $1.20 billion at March 31, 2004, and 427% from $701.4 million at June 30, 2003. The Company’s total loan portfolio is more diversified as a result of
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the Hawthorne acquisition. The most significant changes in the credit concentration levels of the Company’s total loan portfolio were in the multi-family and single family residential loan portfolios. The Company’s multi-family loan portfolio increased $1.02 billion to $2.07 billion at June 30, 2004, from $1.05 billion at March 31, 2004, however, the credit concentration level decreased to 56% of the total loan portfolio at June 30, 2004, from 87% at March 31, 2004. This was primarily the result of the Company’s $921.4 million increase in the single family residential portfolio to $924.2 million at June 30, 2004, from $2.9 million at March 31, 2004. The Company’s single family residential portfolio represents 25% of the total loan portfolio at June 30, 2004. The commercial real estate loan portfolio increased $281.6 million to $427.9 million at June 30, 2004, from $146.3 million at March 31, 2004, however, the credit concentration level slightly decreased from 12.2% to 11.6% of the total loan portfolio. Other additions to the total loan portfolio include construction and land loans, which total $268.6 million and represent 7% of the total loan portfolio at June 30, 2004. Prior to the acquisition of Hawthorne, the Company had one nonaccrual loan, a commercial business line of credit, which had a $39,000 outstanding balance at June 30, 2004. The loan is currently performing in accordance with its restructuring agreement and its outstanding balance has declined from $75,000 and $205,000 at March 31, 2004 and June 30, 2003, respectively. Nonperforming assets totaled $5.7 million, or 0.12% of total assets, at June 30, 2004, with the increase in nonperforming assets resulting from the Company’s acquisition of Hawthorne, consisting solely of single family residential and consumer loans.
The Company’s comprehensive asset quality review, performed during the second quarter of 2004, was based on its enhanced asset classification process along with the prior classification process of Hawthorne applied to the acquired loan portfolio. The Company used this current information, along with other qualitative and quantitative factors, updated industry and peer comparison data to calculate the allowance for loan losses. This comprehensive review indicated that a provision for loan losses for the second quarter of 2004 was not required and that the allowance for loan losses is adequate to cover potential losses inherent in the loan portfolio. Future additions to the allowance for loan losses may be required as a result of the factors described below.
Management establishes the allowance for loan losses commencing with the credit quality and historical performance of the Company’s multi-family, commercial real estate, single family residential, construction, and land loan portfolios, which accounts for virtually all of the loan portfolio. Prior to the acquisition of Hawthorne, the multi-family and commercial real estate loan portfolio had not resulted in any delinquencies more than one payment past due, non-performing loans, adverse classifications or losses. The Company’s overall asset quality remains sound, as supported by its internal risk rating process of a more seasoned multi-family, commercial real estate and single family residential loan portfolio.
The allowance for loan losses is derived by analyzing the historical loss experience and asset quality within each loan portfolio segment, along with assessing qualitative environmental factors, and correlating it with the delinquency and classification status for each portfolio segment. Management utilizes a loan grading system with five classification categories, including assets classified as Pass, based upon credit risk characteristics and categorizes each loan asset by risk grade allowing for a more consistent review of similar loan assets. Management has also evaluated the loss exposure of classified loans, which are reviewed individually based on the evaluation of the cash flow, collateral, other sources of repayment, guarantors and any other relevant factors to determine the inherent loss potential in the credit.
Management considers the following qualitative environmental factors in determining the allocated loss factors when analyzing the allowance for loan losses: the levels of and trends in past due, non-accrual and impaired loans; levels of and trends in charge-offs and recoveries; the trend in volume and terms of loans; the effects of changes in credit concentrations; the effects of changes in risk selection and underwriting standards, and other changes in lending policies, procedures and practices; the experience, ability and depth of management and other relevant staff; national and local economic trends and conditions; and industry conditions.
The overall adequacy of the allowance for loan losses is reviewed by the Bank’s Internal Asset Review Committee on a quarterly basis and submitted to the Board of Directors for approval. The Internal Asset Review Committee’s responsibilities consist of risk management, as well as problem loan management, which include ensuring proper risk grading of all loans and analysis of specific allocations for all classified loans.
At June 30, 2004, Commercial Capital Bancorp, Inc. had total assets of $4.7 billion, and total deposits of $2.4 billion. Commercial Capital Bank operates 20 banking offices located in Westlake Village (Ventura County), Tarzana,
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Malibu, Baldwin Hills, Westchester, Hawthorne, Manhattan Beach, Gardena, Hermosa Beach, Torrance, Redondo Beach (Los Angeles County), Orange, Irvine (3), Rancho Santa Margarita (Orange County), Riverside (Riverside County), La Jolla, Del Mar and San Diego (San Diego County), and 12 lending offices, located in Sacramento, Corte Madera, Burlingame, Oakland, Woodland Hills, Encino, West Los Angeles, El Segundo, Tustin, Irvine, Riverside, and San Diego, California, with plans to open banking offices in Beverly Hills, California in September 2004, San Mateo, California in December 2004, and Newport Coast, California in early 2005. The Company was the 4th largest multi-family lender in California during the 12 months ended March 31, 2004 (source: Dataquick Information Systems) and the Bank was the fastest growing savings institution in California, based on percentage growth in total assets over the 36 months ended March 31, 2004 (source:www.fdic.gov).
CONFERENCE CALL AND WEBCAST INFORMATION
Analysts and investors may listen to a discussion of the second quarter of 2004 performance and participate in the question/answer session either by dialing the phone number listed below, or through viewing a live video webcast of the discussion accessed through a link on the home page of the Company’s website atwww.commercialcapital.com. The multimedia webcast enables participants to listen to the discussion and simultaneously view the video broadcast, tables, charts, an outline of the performance highlights, and submit questions for live response from the hosts. Windows Media player is required for viewing the video webcast. Interested parties can download the slide presentation from the Company’s website prior to the start of the call.
Conference Call | Webcast |
Date: Monday, July 26, 2004 | Date: Monday, July 26, 2004 |
Time: 7:00 a.m. PDT (10:00 a.m. EDT) | Time: 7:00 a.m. PDT (10:00 a.m. EDT) |
Phone Number (800) 901-5213 | Webcast URL:www.commercialcapital.com |
International Dial-in Number (617) 786-2962 | Windows Media player is required |
Access Code: 95297671 | |
Replay information: for those who are unable to participate in the call or webcast, an archive of the webcast will be available on the Company’s site atwww.commercialcapital.com beginning approximately 2 hours following the end of the call. The archive will be available until August 31, 2004.
It is recommended that participants dial into the call, or log in to the webcast, approximately 5 to 10 minutes prior to the event.
This press release and the aforementioned webcast may include forward-looking statements (related to each company’s plans, beliefs and goals), which involve certain risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: competitive pressure in the banking industry; changes in the interest rate environment; the health of the economy, either nationally or regionally; the deterioration of credit quality, which would cause an increase in the provision for possible loan and lease losses; changes in the regulatory environment; changes in business conditions, particularly in California real estate; volatility of rate sensitive deposits; asset/liability matching risks and liquidity risks; and changes in the securities markets. The Company undertakes no obligation to revise or publicly release any revision to these forward-looking statements.
(1) For detail regarding non-GAAP financial measures, see financial tables.
(2) Per share data has been adjusted to reflect the 3-for-2 stock split completed on September 29, 2003, and the 4-for-3 stock split completed on February 20, 2004.
(3) The Company defines core loan originations to exclude those loan originations funded through its strategic alliance with Greystone Servicing Corporation, a Fannie Mae DUS lender, and the Company’s other broker and conduit channels.
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COMMERCIAL CAPITAL BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, except per share data)
| | June 30, 2004 | | June 30, 2003 | |
| |
| |
| |
ASSETS | | | | | | | |
| Cash and Bank Accounts | | $ | 18,379 | | $ | 2,218 | |
| Fed Funds | | | — | | | — | |
| Securities | | | | | | | |
| MBS - Available For Sale | | | 499,746 | | | 581,106 | |
| Other Investments - Available For Sale | | | 100 | | | 101 | |
| |
|
| |
|
| |
| Total Securities | | | 499,846 | | | 581,207 | |
| FHLB Stock | | | 85,543 | | | 30,282 | |
| Loans Held for Investment | | | | | | | |
| Single Family | | | 924,238 | | | 3,239 | |
| Multi-family | | | 2,065,938 | | | 610,202 | |
| Commercial Real Estate | | | 427,898 | | | 78,620 | |
| Construction Loans | | | 216,926 | | | — | |
| Land | | | 51,637 | | | — | |
| |
|
| |
|
| |
| Total Real Estate Loans | | | 3,686,637 | | | 692,061 | |
| Business and Other Loans | | | 12,926 | | | 9,358 | |
| |
|
| |
|
| |
| Total Loans | | | 3,699,563 | | | 701,419 | |
| Net Deferred Fees, Premiums and Discounts | | | (14,801 | ) | | (462 | ) |
| Allowance for Loan Losses | | | (36,831 | ) | | (4,002 | ) |
| |
|
| |
|
| |
| Total Loans Held for Investment, Net | | | 3,647,931 | | | 696,955 | |
| Loans Held for Sale | | | 983 | | | 54,890 | |
| Fixed Assets - Net | | | 8,441 | | | 1,023 | |
| Foreclosed Assets | | | — | | | — | |
| Accrued Interest Receivable | | | 16,897 | | | 5,622 | |
| Goodwill | | | 357,367 | | | 13,035 | |
| Core Deposit Intangible | | | 6,308 | | | — | |
| Bank-Owned Life Insurance | | | 45,843 | | | 17,560 | |
| Other Assets | | | 56,312 | | | 9,029 | |
| |
|
| |
|
| |
TOTAL ASSETS | | $ | 4,743,850 | | $ | 1,411,821 | |
| |
|
| |
|
| |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| Deposits | | | | | | | |
| Demand Deposits - Noninterest-Bearing | | $ | 92,627 | | $ | 9,110 | |
| Demand Deposits - Interest-Bearing | | | 88,922 | | | 806 | |
| Money Market Checking | | | 450,317 | | | 278,542 | |
| Money Market Savings | | | 386,836 | | | — | |
| Savings | | | 198,063 | | | 3,553 | |
| |
|
| |
|
| |
| Total Transaction Deposits | | | 1,216,765 | | | 292,011 | |
| Retail Time Deposits | | | 1,154,211 | | | 189,433 | |
| Broker Time Deposits | | | 72,961 | | | 48,123 | |
| |
|
| |
|
| |
| Total Time Deposits | | | 1,227,172 | | | 237,556 | |
| |
|
| |
|
| |
| Total Deposits | | | 2,443,937 | | | 529,567 | |
| Borrowings | | | | | | | |
| FHLB Advances | | | 1,550,770 | | | 606,733 | |
| Securities Sold Under Agreements to Repurchase | | | — | | | 68,840 | |
| Junior Subordinated Debentures (1) | | | 135,370 | | | — | |
| Trust Preferred Securities (1) | | | — | | | 35,000 | |
| Warehouse Line of Credit | | | — | | | 54,967 | |
| |
|
| |
|
| |
| Total Borrowings | | | 1,686,140 | | | 765,540 | |
| Other Liabilities | | | 30,952 | | | 25,368 | |
| |
|
| |
|
| |
TOTAL LIABILITIES | | | 4,161,029 | | | 1,320,475 | |
| | | | | | | |
| | | | | | | |
STOCKHOLDERS’ EQUITY | | | 582,821 | | | 91,346 | |
| |
|
| |
|
| |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 4,743,850 | | $ | 1,411,821 | |
| |
|
| |
|
| |
| | | | | | | | | | | | |
Operating Data
Performance Ratios and Other Data: | | June 30, 2004 | | June 30, 2003 | |
| |
| |
| |
| Equity to assets at end of period | | | 12.29 | % | | 6.47 | % |
| Tangible equity to assets at end of period | | | 4.62 | | | 5.55 | |
| Tangible equity to tangible assets at end of period | | | 5.00 | | | 5.60 | |
| Nonperforming assets | | $ | 5,699 | | $ | 205 | |
| Nonperforming assets to total assets | | | 0.12 | % | | 0.01 | % |
| Allowance for loan losses to total loans held for investment at end of period | | | 1.00 | | | 0.57 | |
| Allowance for loan losses to nonaccrual loans | | | 646 | | | 1,952 | |
| | | | | | | |
Per Share Data | | | | | | | |
| Common shares outstanding at end of period (2) | | | 53,126,308 | | | 29,275,728 | |
| Book value per share (2) | | $ | 10.97 | | $ | 3.12 | |
| Tangible book value per share (2) | | | 4.13 | | | 2.67 | |
(1) The Company adopted FIN46R on January 1, 2004, which deconsolidated the trust subsidiaries and changes the classification of the related debt from trust preferred securities to junior subordinated debentures.
(2) Per share data has been adjusted to reflect the 3-for-2 stock split on September 29, 2003, and the 4-for-3 stock split on February 20, 2004.
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COMMERCIAL CAPITAL BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, except per share data)
| | THREE MONTHS ENDED | |
| |
| |
| | June 30, 2004 | | June 30, 2003 | |
| |
| |
| |
Interest Income | | | | | | | | | | | |
| Loans | | | $ | 26,647 | | | | $ | 10,309 | | |
| Securities | | | | 6,301 | | | | | 5,700 | | |
| FHLB Stock | | | | 662 | | | | | 278 | | |
| Federal Funds Sold and Other | | | | 16 | | | | | 11 | | |
| | |
|
| | | |
|
| | |
| Total Interest Income | | | | 33,626 | | | | | 16,298 | | |
Interest Expense | | | | | | | | | | | |
| Deposits | | | | 4,815 | | | | | 2,540 | | |
| FHLB Advances | | | | 4,774 | | | | | 2,557 | | |
| Repurchase Agreements | | | | 139 | | | | | 384 | | |
| Junior Subordinated Debentures | | | | 986 | | | | | — | | |
| Trust Preferred Securities | | | | — | | | | | 448 | | |
| Warehouse Line Advances | | | | 37 | | | | | 370 | | |
| | |
|
| | | |
|
| | |
| Total Interest Expense | | | | 10,751 | | | | | 6,299 | | |
| | |
|
| | | |
|
| | |
Net Interest Income | | | | 22,875 | | | | | 9,999 | | |
Provision for Loan Losses | | | | — | | | | | 677 | | |
| | |
|
| | | |
|
| | |
Net Interest Income after Provision for Loan Losses | | | | 22,875 | | | | | 9,322 | | |
Noninterest Income | | | | | | | | | | | |
| Gain on Sale of Loans | | | | 4 | | | | | 571 | | |
| Mortgage Banking Fees | | | | 194 | | | | | 285 | | |
| Loan Related and Other Fees | | | | 1,007 | | | | | 368 | | |
| Retail Banking Fees | | | | 186 | | | | | 15 | | |
| Other Income | | | | 315 | | | | | 278 | | |
| Gain on Sale of Securities | | | | 1,259 | | | | | 1,517 | | |
| | |
|
| | | |
|
| | |
| Total Noninterest Income | | | | 2,965 | | | | | 3,034 | | |
| | | | | | | | | | | |
Noninterest Expenses | | | | | | | | | | | |
| Compensation and Benefits | | | | 3,452 | | | | | 2,127 | | |
| Severance | | | | — | | | | | 241 | | |
| Non-Cash Stock Compensation | | | | 29 | | | | | 145 | | |
| Occupancy and Equipment | | | | 713 | | | | | 292 | | |
| General Operating | | | | 1,933 | | | | | 998 | | |
| Merger-Related | | | | 420 | | | | | — | | |
| | |
|
| | | |
|
| | |
| Total G&A Expenses | | | | 6,547 | | | | | 3,803 | | |
| Early Extinguishment of Debt | | | | 1,204 | | | | | 771 | | |
| Amortization of Core Deposit Intangible | | | | 58 | | | | | — | | |
| | |
|
| | | |
|
| | |
| Total Noninterest Expenses | | | | 7,809 | | | | | 4,574 | | |
| | |
|
| | | |
|
| | |
Income Before Taxes | | | | 18,031 | | | | | 7,782 | | |
Income Tax Expense | | | | 7,108 | | | | | 3,107 | | |
| | |
|
| | | |
|
| | |
Net Income | | | $ | 10,923 | | | | $ | 4,675 | | |
| | |
|
| | | |
|
| | |
| | | | | | | | | | | | | |
Operating Data
Performance Ratios and Other Data: | | June 30, 2004 | | June 30, 2003 | |
| |
| |
| |
| Earnings per share - Basic (1) | | $ | 0.30 | | $ | 0.16 | |
| Earnings per share - Diluted (1) | | | 0.28 | | | 0.15 | |
| Weighted average shares outstanding -- Basic (1) | | | 36,729,282 | | | 29,131,024 | |
| Weighted average shares outstanding -- Diluted (1) | | | 39,194,351 | | | 30,871,625 | |
| Return on average assets | | | 1.57 | % | | 1.48 | % |
| Return on average stockholders’ equity | | | 17.66 | | | 21.08 | |
| Return on average tangible stockholders’ equity | | | 32.58 | | | 24.70 | |
| Interest rate spread | | | 3.41 | | | 3.19 | |
| Net interest margin | | | 3.51 | | | 3.30 | |
| Efficiency ratio | | | 25.34 | | | 29.18 | |
| G&A to average assets | | | 0.94 | | | 1.21 | |
| Effective tax rate | | | 39.42 | | | 39.93 | |
| Total loan originations | | $ | 466,690 | | $ | 207,128 | |
| Core loan originations (2) | | | 418,916 | | | 183,686 | |
| Broker/conduit originations | | | 47,774 | | | 23,442 | |
| Core loan originations retained | | | 420,988 | | | 157,803 | |
| Percent of core loan originations retained | | | 100 | % | | 86 | % |
| Net Charge-offs <Recoveries> | | $ | <2> | | $ | — | |
(1) Per share data has been adjusted to reflect the 3-for-2 stock split on September 29, 2003, and the 4-for-3 stock split on February 20, 2004.
(2) The Company defines core loan originations to exclude those loan originations funded through its strategic alliance with Greystone Servicing Corporation, a Fannie Mae DUS lender, and the Company’s other broker and conduit channels.
11/17
COMMERCIAL CAPITAL BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, except per share data)
| | SIX MONTHS ENDED | |
| |
| |
| | JUNE 30, 2004 | | JUNE 30, 2003 | |
| |
| |
| |
Interest Income | | | | | | | |
| Loans | | | $ | 41,688 | | | | $ | 18,860 | | |
| Securities | | | | 12,471 | | | | | 10,297 | | |
| FHLB Stock | | | | 1,061 | | | | | 513 | | |
| Federal Funds Sold and Other | | | | 36 | | | | | 19 | | |
| | |
|
| | | |
|
| | |
| Total Interest Income | | | | 55,256 | | | | | 29,689 | | |
Interest Expense | | | | | | | | | | | |
| Deposits | | | | 7,903 | | | | | 4,543 | | |
| FHLB Advances | | | | 8,669 | | | | | 4,672 | | |
| Repurchase Agreements | | | | 295 | | | | | 853 | | |
| Junior Subordinated Debentures | | | | 1,624 | | | | | — | | |
| Trust Preferred Securities | | | | — | | | | | 904 | | |
| Warehouse Line Advances | | | | 88 | | | | | 654 | | |
| | |
|
| | | |
|
| | |
| Total Interest Expense | | | | 18,579 | | | | | 11,626 | | |
| | |
|
| | | |
|
| | |
Net Interest Income | | | | 36,677 | | | | | 18,063 | | |
Provision for Loan Losses | | | | — | | | | | 1,286 | | |
| | |
|
| | | |
|
| | |
Net Interest Income after Provision for Loan Losses | | | | 36,677 | | | | | 16,777 | | |
Noninterest Income | | | | | | | | | | | |
| Gain on Sale of Loans | | | | 142 | | | | | 1,546 | | |
| Mortgage Banking Fees | | | | 306 | | | | | 360 | | |
| Loan Related and Other Fees | | | | 1,417 | | | | | 549 | | |
| Retail Banking Fees | | | | 213 | | | | | 29 | | |
| Other Income | | | | 553 | | | | | 601 | | |
| Gain on Sale of Securities | | | | 2,152 | | | | | 3,164 | | |
| | |
|
| | | |
|
| | |
| Total Noninterest Income | | | | 4,783 | | | | | 6,249 | | |
| | | | | | | | | | | |
Noninterest Expenses | | | | | | | | | | | |
| Compensation and Benefits | | | | 5,662 | | | | | 3,631 | | |
| Severance | | | | — | | | | | 671 | | |
| Non-Cash Stock Compensation | | | | 58 | | | | | 353 | | |
| Occupancy and Equipment | | | | 1,074 | | | | | 500 | | |
| General Operating | | | | 3,372 | | | | | 2,041 | | |
| Merger-Related | | | | 420 | | | | | — | | |
| | |
|
| | | |
|
| | |
| Total G&A Expenses | | | | 10,586 | | | | | 7,196 | | |
| Early Extinguishment of Debt | | | | 1,204 | | | | | 923 | | |
| Amortization of Core Deposit Intangible | | | | 58 | | | | | — | | |
| | |
|
| | | |
|
| | |
| Total Noninterest Expenses | | | | 11,848 | | | | | 8,119 | | |
| | |
|
| | | |
|
| | |
Income Before Taxes | | | | 29,612 | | | | | 14,907 | | |
Income Tax Expense | | | | 11,588 | | | | | 5,993 | | |
| | |
|
| | | |
|
| | |
Net Income | | | $ | 18,024 | | | | $ | 8,914 | | |
| | |
|
| | | |
|
| | |
| | | | | | | | | | | | | |
Operating Data | | SIX MONTHS ENDED | |
| |
| |
Performance Ratios and Other Data: | | JUNE 30, 2004 | | JUNE 30, 2003 | |
| |
| |
| |
| Earnings per share - Basic (1) | | $ | 0.54 | | $ | 0.31 | |
| Earnings per share - Diluted (1) | | | 0.50 | | | 0.29 | |
| Weighted average shares outstanding -- Basic (1) | | | 33,374,139 | | | 28,888,008 | |
| Weighted average shares outstanding -- Diluted (1) | | | 35,704,940 | | | 30,469,140 | |
| Return on average assets | | | 1.56 | % | | 1.58 | % |
| Return on average stockholders’ equity | | | 20.29 | | | 20.85 | |
| Return on average tangible stockholders’ equity | | | 31.48 | | | 24.60 | |
| Interest rate spread | | | 3.26 | | | 3.22 | |
| Net interest margin | | | 3.36 | | | 3.35 | |
| Efficiency ratio | | | 25.53 | | | 29.60 | |
| G&A to average assets | | | 0.92 | | | 1.28 | |
| Effective tax rate | | | 39.13 | | | 40.20 | |
| Total loan originations | | $ | 726,062 | | $ | 474,079 | |
| Core loan originations (2) | | | 649,019 | | | 440,883 | |
| Broker/conduit originations | | | 77,043 | | | 33,196 | |
| Core loan originations retained | | | 648,816 | | | 288,921 | |
| Percent of core loan originations retained | | | 100 | % | | 66 | % |
| Net Charge-offs <Recoveries> | | $ | <4> | | $ | — | |
(1) Per share data has been adjusted to reflect the 3-for-2 stock split on September 29, 2003, and the 4-for-3 stock split on February 20, 2004.
(2) The Company defines core loan originations to exclude those loan originations funded through its strategic alliance with Greystone Servicing Corporation, a Fannie Mae DUS lender, and the Company’s other broker and conduit channels.
12/17
COMMERCIAL CAPITAL BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, except per share data)
| | June 30, 2004 | | Mar. 31, 2004 | | Dec. 31, 2003 | | Sept. 30, 2003 | | June 30, 2003 | |
| |
| |
| |
| |
| |
| |
ASSETS | | | | | | | | | | | | | | | | |
| Cash and Bank Accounts | | $ | 18,379 | | $ | 7,897 | | $ | 4,066 | | $ | 8,347 | | $ | 2,218 | |
| Fed Funds | | | — | | | 64,000 | | | — | | | 20,500 | | | — | |
| Securities | | | | | | | | | | | | | | | | |
| MBS - Available For Sale | | | 499,746 | | | 506,682 | | | 560,629 | | | 448,859 | | | 581,106 | |
| Other Investments - Available For Sale | | | 100 | | | 100 | | | 100 | | | 101 | | | 101 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Securities | | | 499,846 | | | 506,782 | | | 560,729 | | | 448,960 | | | 581,207 | |
| FHLB Stock | | | 85,543 | | | 48,475 | | | 41,517 | | | 35,395 | | | 30,282 | |
| Loans Held for Investment | | | | | | | | | | | | | | | | |
| Single Family | | | 924,238 | | | 2,882 | | | 3,193 | | | 2,754 | | | 3,239 | |
| Multi-family | | | 2,065,938 | | | 1,045,651 | | | 935,063 | | | 764,996 | | | 610,202 | |
| Commercial Real Estate | | | 427,898 | | | 146,329 | | | 108,560 | | | 83,687 | | | 78,620 | |
| Construction Loans | | | 216,926 | | | — | | | — | | | — | | | — | |
| Land | | | 51,637 | | | — | | | — | | | — | | | — | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Real Estate Loans | | | 3,686,637 | | | 1,194,862 | | | 1,046,816 | | | 851,437 | | | 692,061 | |
| Business and Other Loans | | | 12,926 | | | 7,094 | | | 5,711 | | | 10,397 | | | 9,358 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Loans | | | 3,699,563 | | | 1,201,956 | | | 1,052,527 | | | 861,834 | | | 701,419 | |
| Net Deferred Fees, Premiums and Discounts | | | (14,801 | ) | | (1,087 | ) | | (953 | ) | | (808 | ) | | (462 | ) |
| Allowance for Loan Losses | | | (36,831 | ) | | (3,944 | ) | | (3,942 | ) | | (3,938 | ) | | (4,002 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Loans Held for Investment, Net | | | 3,647,931 | | | 1,196,925 | | | 1,047,632 | | | 857,088 | | | 696,955 | |
| Loans Held for Sale | | | 983 | | | 3,079 | | | 14,893 | | | 26,514 | | | 54,890 | |
| Fixed Assets - Net | | | 8,441 | | | 1,784 | | | 1,534 | | | 1,400 | | | 1,023 | |
| Foreclosed Assets | | | — | | | — | | | — | | | — | | | — | |
| Accrued Interest Receivable | | | 16,897 | | | 7,626 | | | 6,827 | | | 5,514 | | | 5,622 | |
| Goodwill | | | 357,367 | | | 13,035 | | | 13,035 | | | 13,035 | | | 13,035 | |
| Core Deposit Intangible | | | 6,308 | | | — | | | — | | | — | | | — | |
| Bank-Owned Life Insurance | | | 45,843 | | | 18,130 | | | 17,925 | | | 17,774 | | | 17,560 | |
| Other Assets | | | 56,312 | | | 91,923 | | | 14,981 | | | 15,061 | | | 9,029 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
TOTAL ASSETS | | $ | 4,743,850 | | $ | 1,959,656 | | $ | 1,723,139 | | $ | 1,449,588 | | $ | 1,411,821 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | |
| Demand Deposits - Noninterest-Bearing | | $ | 92,627 | | $ | 35,959 | | $ | 12,125 | | $ | 8,827 | | $ | 9,110 | |
| Demand Deposits - Interest-Bearing | | | 88,922 | | | 1,084 | | | 942 | | | 858 | | | 806 | |
| Money Market Checking | | | 450,317 | | | 441,595 | | | 372,273 | | | 312,501 | | | 278,542 | |
| Money Market Savings | | | 386,836 | | | — | | | — | | | — | | | — | |
| Savings | | | 198,063 | | | 3,105 | | | 2,700 | | | 2,365 | | | 3,553 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Transaction Deposits | | | 1,216,765 | | | 481,743 | | | 388,040 | | | 324,551 | | | 292,011 | |
| Retail Time Deposits | | | 1,154,211 | | | 186,597 | | | 189,566 | | | 183,742 | | | 189,433 | |
| Broker Time Deposits | | | 72,961 | | | 67,960 | | | 67,990 | | | 58,117 | | | 48,123 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Time Deposits | | | 1,227,172 | | | 254,557 | | | 257,556 | | | 241,859 | | | 237,556 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Deposits | | | 2,443,937 | | | 736,300 | | | 645,596 | | | 566,410 | | | 529,567 | |
| Borrowings | | | | | | | | | | | | | | | | |
| FHLB Advances | | | 1,550,770 | | | 970,477 | | | 822,519 | | | 686,562 | | | 606,733 | |
| Securities Sold Under Agreements to Repurchase | | | — | | | 58,502 | | | 74,475 | | | — | | | 68,840 | |
| Junior Subordinated Debentures (1) | | | 135,370 | | | 64,435 | | | — | | | — | | | — | |
| Trust Preferred Securities (1) | | | — | | | — | | | 52,500 | | | 42,500 | | | 35,000 | |
| Warehouse Line of Credit | | | — | | | 2,100 | | | 13,794 | | | 26,512 | | | 54,967 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Borrowings | | | 1,686,140 | | | 1,095,514 | | | 963,288 | | | 755,574 | | | 765,540 | |
| Other Liabilities | | | 30,952 | | | 14,082 | | | 12,213 | | | 31,502 | | | 25,368 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
TOTAL LIABILITIES | | | 4,161,029 | | | 1,845,896 | | | 1,621,097 | | | 1,353,486 | | | 1,320,475 | |
| | | | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY | | | 582,821 | | | 113,760 | | | 102,042 | | | 96,102 | | | 91,346 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 4,743,850 | | $ | 1,959,656 | | $ | 1,723,139 | | $ | 1,449,588 | | $ | 1,411,821 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | | | | | | | | | | |
Operating Data | | | | | | | | | | | | | | | | |
Performance Ratios and Other Data: | | June 30, 2004 | | Mar. 31, 2004 | | Dec. 31, 2003 | | Sept. 30, 2003 | | June 30, 2003 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Equity to assets at end of period | | | 12.29 | % | | 5.81 | % | | 5.92 | % | | 6.63 | % | | 6.47 | % |
| Tangible equity to assets at end of period | | | 4.62 | | | 5.14 | | | 5.17 | | | 5.73 | | | 5.55 | |
| Tangible equity to tangible assets at end of period | | | 5.00 | | | 5.17 | | | 5.20 | | | 5.78 | | | 5.60 | |
| Nonperforming assets | | $ | 5,699 | | $ | 75 | | $ | 129 | | $ | 175 | | $ | 205 | |
| Nonperforming assets to total assets | | | 0.12 | % | | 0.00 | % | | 0.01 | % | | 0.01 | % | | 0.01 | % |
| Allowance for loan losses to total loans held for investment at end of period | | | 1.00 | | | 0.33 | | | 0.37 | | | 0.46 | | | 0.57 | |
| Allowance for loan losses to nonaccrual loans | | | 646 | | | 5,259 | | | 3,056 | | | 2,250 | | | 1,952 | |
| | | | | | | | | | | | | | | | |
Per Share Data | | | | | | | | | | | | | | | | |
| Common shares outstanding at end of period (2) | | | 53,126,308 | | | 30,100,472 | | | 29,956,372 | | | 29,859,865 | | | 29,275,728 | |
| Book value per share (2) | | $ | 10.97 | | $ | 3.78 | | $ | 3.41 | | $ | 3.22 | | $ | 3.12 | |
| Tangible book value per share (2) | | | 4.13 | | | 3.35 | | | 2.97 | | | 2.78 | | | 2.67 | |
(1) The Company adopted FIN46R on January 1, 2004, which deconsolidated the trust subsidiaries and changes the classification of the related debt from trust preferred securities to junior subordinated debentures.
(2) Per share data has been adjusted to reflect the 3-for-2 stock split on September 29, 2003, and the 4-for-3 stock split on February 20, 2004.
13/17
COMMERCIAL CAPITAL BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, except per share data)
| | THREE MONTHS ENDED | |
| |
| |
| | June 30, 2004 | | Mar. 31, 2004 | | Dec. 31, 2003 | | Sept. 30, 2003 | | June 30, 2003 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Interest Income | | | | | | | | | | | | | | | | |
| Loans | | | $ | 26,647 | | | | $ | 15,041 | | | | $ | 13,593 | | | | $ | 11,425 | | | | $ | 10,309 | | |
| Securities | | | | 6,301 | | | | | 6,170 | | | | | 5,435 | | | | | 5,273 | | | | | 5,700 | | |
| FHLB Stock | | | | 662 | | | | | 399 | | | | | 382 | | | | | 345 | | | | | 278 | | |
| Federal Funds Sold and Other | | | | 16 | | | | | 20 | | | | | 15 | | | | | 17 | | | | | 11 | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
| Total Interest Income | | | | 33,626 | | | | | 21,630 | | | | | 19,425 | | | | | 17,060 | | | | | 16,298 | | |
Interest Expense | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | 4,815 | | | | | 3,088 | | | | | 2,880 | | | | | 2,676 | | | | | 2,540 | | |
| FHLB Advances | | | | 4,774 | | | | | 3,895 | | | | | 3,362 | | | | | 2,941 | | | | | 2,557 | | |
| Repurchase Agreements | | | | 139 | | | | | 156 | | | | | 179 | | | | | 76 | | | | | 384 | | |
| Junior Subordinated Debentures | | | | 986 | | | | | 638 | | | | | — | | | | | — | | | | | — | | |
| Trust Preferred Securities | | | | — | | | | | — | | | | | 534 | | | | | 438 | | | | | 448 | | |
| Warehouse Line Advances | | | | 37 | | | | | 51 | | | | | 107 | | | | | 121 | | | | | 370 | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
| Total Interest Expense | | | | 10,751 | | | | | 7,828 | | | | | 7,062 | | | | | 6,252 | | | | | 6,299 | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
Net Interest Income | | | | 22,875 | | | | | 13,802 | | | | | 12,363 | | | | | 10,808 | | | | | 9,999 | | |
Provision for Loan Losses | | | | — | | | | | — | | | | | — | | | | | — | | | | | 677 | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
Net Interest Income after Provision for Loan Losses | | | | 22,875 | | | | | 13,802 | | | | | 12,363 | | | | | 10,808 | | | | | 9,322 | | |
Noninterest Income | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on Sale of Loans | | | | 4 | | | | | 138 | | | | | 424 | | | | | 198 | | | | | 571 | | |
| Mortgage Banking Fees | | | | 194 | | | | | 112 | | | | | 136 | | | | | 244 | | | | | 285 | | |
| Loan Related and Other Fees | | | | 1,007 | | | | | 410 | | | | | 404 | | | | | 312 | | | | | 368 | | |
| Retail Banking Fees | | | | 186 | | | | | 27 | | | | | 34 | | | | | 23 | | | | | 15 | | |
| Other Income | | | | 315 | | | | | 238 | | | | | 180 | | | | | 314 | | | | | 278 | | |
| Gain on Sale of Securities | | | | 1,259 | | | | | 893 | | | | | 256 | | | | | 395 | | | | | 1,517 | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
| Total Noninterest Income | | | | 2,965 | | | | | 1,818 | | | | | 1,434 | | | | | 1,486 | | | | | 3,034 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Compensation and Benefits | | | | 3,452 | | | | | 2,210 | | | | | 2,008 | | | | | 2,019 | | | | | 2,127 | | |
| Severance | | | | — | | | | | — | | | | | — | | | | | — | | | | | 241 | | |
| Non-Cash Stock Compensation | | | | 29 | | | | | 29 | | | | | — | | | | | — | | | | | 145 | | |
| Occupancy and Equipment | | | | 713 | | | | | 361 | | | | | 334 | | | | | 344 | | | | | 292 | | |
| General Operating | | | | 1,933 | | | | | 1,439 | | | | | 1,220 | | | | | 1,024 | | | | | 998 | | |
| Merger-Related | | | | 420 | | | | | — | | | | | — | | | | | — | | | | | — | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
| Total G&A Expenses | | | | 6,547 | | | | | 4,039 | | | | | 3,562 | | | | | 3,387 | | | | | 3,803 | | |
| Early Extinguishment of Debt | | | | 1,204 | | | | | — | | | | | 58 | | | | | 320 | | | | | 771 | | |
| Amortization of Core Deposit Intangible | | | | 58 | | | | | — | | | | | — | | | | | — | | | | | — | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
| Total Noninterest Expenses | | | | 7,809 | | | | | 4,039 | | | | | 3,620 | | | | | 3,707 | | | | | 4,574 | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
Income Before Taxes | | | | 18,031 | | | | | 11,581 | | | | | 10,177 | | | | | 8,587 | | | | | 7,782 | | |
Income Tax Expense | | | | 7,108 | | | | | 4,480 | | | | | 4,019 | | | | | 3,230 | | | | | 3,107 | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
Net Income | | | $ | 10,923 | | | | $ | 7,101 | | | | $ | 6,158 | | | | $ | 5,357 | | | | $ | 4,675 | | |
| | |
|
| | | |
|
| | | |
|
| | | |
|
| | | |
|
| | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Data | | THREE MONTHS ENDED | |
| |
| |
Performance Ratios and Other Data: | | June 30, 2004 | | Mar. 31, 2004 | | Dec. 31, 2003 | | Sept. 30, 2003 | | June 30, 2003 | |
| |
| |
| |
| |
| |
| |
| Earnings per share - Basic (1) | | $ | 0.30 | | $ | 0.24 | | $ | 0.21 | | $ | 0.18 | | $ | 0.16 | |
| Earnings per share - Diluted (1) | | | 0.28 | | | 0.22 | | | 0.19 | | | 0.17 | | | 0.15 | |
| Weighted average shares outstanding -- Basic (1) | | | 36,729,282 | | | 30,018,996 | | | 29,917,584 | | | 29,609,168 | | | 29,131,024 | |
| Weighted average shares outstanding -- Diluted (1) | | | 39,194,351 | | | 32,215,530 | | | 32,007,081 | | | 31,569,969 | | | 30,871,625 | |
| Return on average assets | | | 1.57 | % | | 1.56 | % | | 1.56 | % | | 1.58 | % | | 1.48 | % |
| Return on average stockholders’ equity | | | 17.66 | | | 26.30 | | | 24.83 | | | 23.84 | | | 21.08 | |
| Return on average tangible stockholders’ equity | | | 32.58 | | | 29.91 | | | 28.59 | | | 27.89 | | | 24.70 | |
| Interest rate spread | | | 3.41 | | | 3.03 | | | 3.16 | | | 3.27 | | | 3.19 | |
| Net interest margin | | | 3.51 | | | 3.14 | | | 3.23 | | | 3.33 | | | 3.30 | |
| Efficiency ratio | | | 25.34 | | | 25.86 | | | 25.82 | | | 27.55 | | | 29.18 | |
| G&A to average assets | | | 0.94 | | | 0.89 | | | 0.90 | | | 1.00 | | | 1.21 | |
| Effective tax rate | | | 39.42 | | | 38.68 | | | 39.49 | | | 37.61 | | | 39.93 | |
| Total loan originations | | $ | 466,690 | | $ | 259,372 | | $ | 304,039 | | $ | 331,384 | | $ | 207,128 | |
| Core loan originations (2) | | | 418,916 | | | 230,103 | | | 274,884 | | | 243,415 | | | 183,686 | |
| Broker/conduit originations | | | 47,774 | | | 29,269 | | | 29,155 | | | 87,969 | | | 23,442 | |
| Core loan originations retained | | | 420,988 | | | 227,828 | | | 257,289 | | | 221,799 | | | 157,803 | |
| Percent of core loan originations retained | | | 100 | % | | 99 | % | | 94 | % | | 91 | % | | 86 | % |
| Net Charge-offs <Recoveries> | | $ | <2> | | $ | <2> | | $ | <4> | | $ | 64 | | $ | — | |
(1) Per share data has been adjusted to reflect the 3-for-2 stock split on September 29, 2003, and the 4-for-3 stock split on February 20, 2004.
(2) The Company defines core loan originations to exclude those loan originations funded through its strategic alliance with Greystone Servicing Corporation, a Fannie Mae DUS lender, and the Company’s other broker and conduit channels.
14/17
COMMERCIAL CAPITAL BANCORP, INC.
Average Balances, Net Interest Income, Yields Earned and Rates Paid
| | Three Months Ended June 30, | |
| |
| |
| | 2004 | | 2003 | |
| |
| |
| |
| | Average Balance | | Interest | | Average
Yield/Cost | | Average
Balance | | Interest | | Average
Yield/Cost | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| | (Dollars in thousand) | |
| | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | | |
| Total loans(1) | | | $ | 1,958,375 | | | $ | 26,647 | | | 5.44 | % | | $ | 689,549 | | $ | 10,309 | | | 5.98 | % | |
| Securities(2) | | | | 581,891 | | | | 6,301 | | | 4.33 | | | | 493,704 | | | 5,700 | | | 4.62 | | |
| FHLB stock | | | | 59,173 | | | | 662 | | | 4.48 | | | | 25,286 | | | 278 | | | 4.40 | | |
| Cash and cash equivalents(3) | | | | 4,985 | | | | 16 | | | 1.28 | | | | 3,507 | | | 11 | | | 1.25 | | |
| | |
|
| | |
|
| | | | | |
|
| |
|
| | | | | |
| Total interest earning assets | | | | 2,604,424 | | | | 33,626 | | | 5.16 | | | | 1,212,046 | | | 16,298 | | | 5.38 | | |
| Noninterest earning assets | | | | 187,088 | | | | | | | | | | | 47,836 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Total assets | | | $ | 2,791,512 | | | | | | | | | | $ | 1,259,882 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | | | | |
| Transaction accounts(4) | | | $ | 641,765 | | | | 2,767 | | | 1.73 | | | $ | 261,169 | | | 1,480 | | | 2.27 | | |
| Certificates of deposits | | | | 537,589 | | | | 2,048 | | | 1.53 | | | | 209,595 | | | 1,060 | | | 2.03 | | |
| | |
|
| | |
|
| | | | | |
|
| |
|
| | | | | |
| Total deposits | | | | 1,179,354 | | | | 4,815 | | | 1.64 | | | | 470,764 | | | 2,540 | | | 2.16 | | |
| Securities sold under agreements to repurchase | | | | 51,237 | | | | 139 | | | 1.09 | | | | 117,390 | | | 384 | | | 1.31 | | |
| FHLB advances | | | | 1,149,387 | | | | 4,774 | | | 1.67 | | | | 472,758 | | | 2,557 | | | 2.17 | | |
| Warehouse line of credit | | | | 6,849 | | | | 37 | | | 2.17 | | | | 58,530 | | | 370 | | | 2.54 | | |
| Trust preferred securities / Junior subordinated debt | | | | 84,034 | | | | 986 | | | 4.72 | | | | 35,000 | | | 448 | | | 5.13 | | |
| | |
|
| | |
|
| | | | | |
|
| |
|
| | | | | |
| Total interest-bearing liabilities | | | | 2,470,861 | | | | 10,751 | | | 1.75 | | | | 1,154,442 | | | 6,299 | | | 2.19 | | |
| | | | | | |
|
| | | | | | | | |
|
| | | | | |
| Noninterest-bearing deposits | | | | 53,495 | | | | | | | | | | | 8,422 | | | | | | | | |
| Other noninterest-bearing liabilities | | | | 19,818 | | | | | | | | | | | 8,289 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Total liabilities | | | | 2,544,174 | | | | | | | | | | | 1,171,153 | | | | | | | | |
| Stockholders’ equity | | | | 247,338 | | | | | | | | | | | 88,729 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Total liabilities and stockholders’ equity | | | $ | 2,791,512 | | | | | | | | | | $ | 1,259,882 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Net interest-earning assets | | | $ | 133,563 | | | | | | | | | | $ | 57,604 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Net interest income/interest rate spread | | | | | | | $ | 22,875 | | | 3.41 | % | | | | | $ | 9,999 | | | 3.19 | % | |
| | | | | | |
|
| |
|
| | | | | |
|
| |
|
| | |
| Net interest margin | | | | | | | | | | | 3.51 | % | | | | | | | | | 3.30 | % | |
| | | | | | | | | |
|
| | | | | | | | |
|
| | |
(1) | The average balance of loans receivable includes loans for sale and is presented without reduction for the allowance for loan losses. |
| |
(2) | Consists of mortgage-backed securities and U.S. government securities which are classified as available-for-sale, excluding the unrealized gains or losses on these securities. |
| |
(3) | Consists of cash in interest-earning accounts and federal funds sold. |
| |
(4) | Consists of savings, money market accounts and other interest-bearing deposits. |
15/17
COMMERCIAL CAPITAL BANCORP, INC.
Average Balances, Net Interest Income, Yields Earned and Rates Paid
| | Six Months Ended June 30, | |
| |
| |
| | 2004 | | 2003 | |
| |
| |
| |
| | Average Balance | | Interest | | Average
Yield/Cost | | Average
Balance | | Interest | | Average
Yield/Cost | |
| |
| |
| |
| |
| |
| |
| |
| | (Dollars in thousand) | |
| | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | |
| Total loans(1) | | | $ | 1,540,505 | | | $ | 41,688 | | | 5.41 | % | | $ | 621,050 | | $ | 18,860 | | | 6.07 | % | |
| Securities(2) | | | | 581,865 | | | | 12,471 | | | 4.29 | | | | 433,485 | | | 10,297 | | | 4.75 | | |
| FHLB stock | | | | 52,063 | | | | 1,061 | | | 4.08 | | | | 21,747 | | | 513 | | | 4.72 | | |
| Cash and cash equivalents(3) | | | | 7,106 | | | | 36 | | | 1.01 | | | | 3,017 | | | 19 | | | 1.26 | | |
| | |
|
| | |
|
| | | | | |
|
| |
|
| | | | | |
| Total interest earning assets | | | | 2,181,539 | | | | 55,256 | | | 5.07 | | | | 1,079,299 | | | 29,689 | | | 5.50 | | |
| Noninterest earning assets | | | | 123,165 | | | | | | | | | | | 48,920 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Total assets | | | $ | 2,304,704 | | | | | | | | | | $ | 1,128,219 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | | | | |
| Transaction accounts(4) | | | $ | 530,577 | | | | 4,771 | | | 1.81 | | | $ | 230,859 | | | 2,709 | | | 2.37 | | |
| Certificates of deposits | | | | 398,575 | | | | 3,132 | | | 1.58 | | | | 169,826 | | | 1,834 | | | 2.18 | | |
| | |
|
| | |
|
| | | | | |
|
| |
|
| | | | | |
| Total deposits | | | | 929,152 | | | | 7,903 | | | 1.71 | | | | 400,685 | | | 4,543 | | | 2.29 | | |
| Securities sold under agreements to repurchase | | | | 53,003 | | | | 295 | | | 1.12 | | | | 129,275 | | | 853 | | | 1.33 | | |
| FHLB advances | | | | 1,008,654 | | | | 8,669 | | | 1.73 | | | | 411,268 | | | 4,672 | | | 2.29 | | |
| Warehouse line of credit | | | | 8,223 | | | | 88 | | | 2.15 | | | | 49,940 | | | 654 | | | 2.64 | | |
| Trust preferred securities / Junior subordinated debt | | | | 69,136 | | | | 1,624 | | | 4.72 | | | | 35,000 | | | 904 | | | 5.21 | | |
| | |
|
| | |
|
| | | | | |
|
| |
|
| | | | | |
| Total interest-bearing liabilities | | | | 2,068,168 | | | | 18,579 | | | 1.81 | | | | 1,026,168 | | | 11,626 | | | 2.28 | | |
| | | | | | |
|
| | | | | | | | |
|
| | | | | |
| Noninterest-bearing deposits | | | | 43,410 | | | | | | | | | | | 7,496 | | | | | | | | |
| Other noninterest-bearing liabilities | | | | 15,467 | | | | | | | | | | | 9,038 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Total liabilities | | | | 2,127,045 | | | | | | | | | | | 1,042,702 | | | | | | | | |
| Stockholders’ equity | | | | 177,659 | | | | | | | | | | | 85,517 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Total liabilities and stockholders’ equity | | | $ | 2,304,704 | | | | | | | | | | $ | 1,128,219 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Net interest-earning assets | | | $ | 113,371 | | | | | | | | | | $ | 53,131 | | | | | | | | |
| | |
|
| | | | | | | | | |
|
| | | | | | | | |
| Net interest income/interest rate spread | | | | | | | $ | 36,677 | | | 3.26 | % | | | | | $ | 18,063 | | | 3.22 | % | |
| | | | | | |
|
| |
|
| | | | | |
|
| |
|
| | |
| Net interest margin | | | | | | | | | | | 3.36 | % | | | | | | | | | 3.35 | % | |
| | | | | | | | | |
|
| | | | | | | | |
|
| | |
(1) | The average balance of loans receivable includes loans for sale and is presented without reduction for the allowance for loan losses. |
| |
(2) | Consists of mortgage-backed securities and U.S. government securities which are classified as available-for-sale, excluding the unrealized gains or losses on these securities. |
| |
(3) | Consists of cash in interest-earning accounts and federal funds sold. |
| |
(4) | Consists of savings, money market accounts and other interest-bearing deposits. |
16/17
COMMERCIAL CAPITAL BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Dollars in Thousands, except per share data)
The following is a reconciliation of the Company’s GAAP net income compared to net income excluding non-recurring items:
| | Three Months Ended
June 30, 2004 | |
| |
| |
| | | | |
| Net Income | | | $ | 10,923 | | |
| Excluding Non-recurring Items: | | | | | | |
| Merger-Related Expenses | | | | 420 | | |
| Gain on Sale of Securities | | | | (1,259 | ) | |
| Early Extinguishment of Debt | | | | 1,204 | | |
| Net Tax Effect at 42% | | | | (153 | ) | |
| | |
|
| | |
| Net Income Excluding Non-recurring Items | | | $ | 11,135 | | |
| | | | | | |
| Weighted Average Shares Outstanding - Diluted | | | | 39,194,351 | | |
| | | | | | |
| Earnings Per Share - Diluted | | | $ | 0.28 | | |
The following table is a reconciliation of the Company’s reported net interest margin and net interest spread compared to adjusted net interest margin and net interest spread excluding the net effect of the amortization or accretion of premiums or discounts resulting from the purchase accounting adjustments due to the Hawthorne acquisition:
| | 2Q 2004 As Reported | | Excluding
Premium/Discount Effect | | 2Q 2004 Adjusted | |
| |
| |
| |
| |
| | Average
Balance | | Interest | | Avg.
Yield/Cost | | Average
Balance | | Interest | | Average
Balance | | Interest | | Avg.
Yield/Cost | |
| | | | | | | | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Total Interest-Earning Assets | | $ | 2,604,424 | | $ | 33,626 | | | 5.16 | % | | | $ | 4,304 | | | $ | (832 | ) | $ | 2,608,728 | | $ | 32,794 | | | 5.03 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest-Bearing Liabilities | | | 2,470,861 | | | 10,751 | | | 1.75 | % | | | | (2,535 | ) | | | 394 | | | 2,468,326 | | | 11,145 | | | 1.82 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | |
|
| | | | | | | | | | |
|
| | | | |
|
| | | | | |
| Net interest income/interest rate spread | | | | | $ | 22,875 | | | 3.41 | % | | | | | | | $ | (1,226 | ) | | | | $ | 21,649 | | | 3.21 | % | |
| Net interest margin | | | | | | | | | 3.51 | % | | | | | | | | | | | | | | | | | 3.32 | % | |
17/17
