Cape Bancorp 8-K Cape Bancorp, Inc. Reports First Quarter 2009 Results

Exhibit 99.1

CAPE BANCORP, INC. REPORTS
FIRST QUARTER 2009 RESULTS

Cape May Court House, New Jersey, May 8, 2009Cape Bancorp, Inc. (“Cape Bancorp”) (NASDAQ: “CBNJ”), the parent company of Cape Bank, announces its operating results for the quarter ended March 31, 2009. It should be noted that the release compares financial positions only on the linked quarters due to the merger with Boardwalk Bank which occurred on January 31, 2008. Merger related items render the 2008 and 2009 first quarter comparison of limited utility.

Cape Bancorp reported a net loss of $99 thousand, or $0.01 per share, for the March 2009 quarter, compared to a net loss of $42.2 million, or $3.43 per share reported for the quarter ended December 31, 2008. The current quarterly loss was largely the result of other-than-temporary impairment (OTTI) charges of $1.5 million on collateralized debt obligation investments in pooled trust preferred securities and a contractual compensation payout of $1.3 million.

Net interest margin for the quarter ended March 31, 2009 increased slightly to 3.53% from 3.52% for the quarter ended December 31, 2008. Return on average assets for the quarter ended March 31, 2009 improved to (0.04)% from (14.94)% for the quarter ended December 31, 2008. Return on average equity for the quarter ended March 31, 2009 improved to (0.28)% from (96.08)% for the quarter ended December 31, 2008.

At March 31, 2009, Cape Bancorp’s total assets increased to $1.106 billion from $1.091 billion at December 31, 2008, an increase of $15.0 million or 1.37%. The increase is primarily attributed to increases in investment securities of $11.6 million, increases in net loans of $10.3 million, with these increases being partially offset with a decrease in interest earning deposits at other institutions of $7.6 million.

At March 31, 2009, Cape Bancorp’s total net loans increased to $794.2 million from $783.9 million at December 31, 2008, an increase of $10.3 million or 1.31%. The change reflects an increase in mortgage loans of $4.6 million, commercial loans of $6.7 million and a decline in consumer loans of $300,000. This change is inclusive of an increase in the allowance for loan losses of $684,000.

Delinquent loans increased $3.8 million to $37.1 million or 4.6% of total gross loans at March 31, 2009 from $33.3 million, or 4.2% of total loans at December 31, 2008. Total delinquent loans by portfolio at March 31, 2009 were $30.1 million of commercial loans, $5.8 million of mortgage loans and $1.2 million of consumer loans. Delinquent loan balances by number of days delinquent were: 31 to 59 days — $3.6 million; 60 to 89 days — $3.4 million; and 90 days and greater — $30.1 million.

At March 31, 2009, the Company had $30.1 million in non-performing loans or 3.73% of total gross loans, an increase from $21.1 million or 2.65% at December 31, 2008. Total non-performing loans by portfolio were $26.2 million of commercial loans, $3.5 million of mortgage loans and $400,000 of consumer loans. Commercial non-performing loans had collateral type concentrations of 13% in residential, duplex and multi-family related loans, 21% in land and building lot related loans, 6% in retail store related loans, 19% in restaurant related loans, 8% in marina related loans, 7% in auto dealership related loans, 12% in B&B and hotel related loans and 14% in commercial building and equipment related loans. The three largest relationships in this category of non-performing loans are $2.9 million, $2.8 million, and $2.1 million.

At March 31, 2009, Cape Bancorp’s allowance for loan losses increased to $11.9 million from $11.2 million at December 31, 2008, an increase of $684,000 or 6.11%. The allowance for loan loss ratio increased to 1.48% of gross loans from 1.41% of gross loans at December 31, 2008. The allowance for loan losses to non-performing loan coverage ratio decreased to 39.67% at March 31, 2009 from 53.39% at December 31, 2008. Net charge-offs during the quarter ended March 31, 2009 were $61,000 compared to $5.6 million for the quarter ended December 31, 2008.

Cape Bancorp’s total investment securities at March 31, 2009, increased to $175.1 million from $163.5 million at December 31, 2008, an increase of $11.6 million or 7.09%. Of this amount, investment securities classified as available-for-sale were $124.8 million, or 71.27% of total investment securities. At March 31, 2009, the cost basis of the collateralized debt obligation portion of the investment portfolio securities was $10.3 million with a fair market value of $1.4 million. Management will continue to monitor this portfolio for OTTI considering but not limited to factors such as downgrades to sub-investment grade (BBB), inadequate projected cash flows for contractual obligations, or continued decline in market valuation for a substantial period of time. For the quarter ended March 31, 2009, Cape Bancorp recognized an OTTI charge of $1.5 million on the collateralized debt obligation portion of the investment portfolio.

At March 31, 2009 Cape Bancorp’s total deposits increased to $790.3 million from $711.1 million at December 31, 2008, an increase of $79.2 million or 11.14%. Core deposits (DDA, savings and money market accounts) increased to $374.9 million at March 31, 2009 from $351.9 million at December 31, 2008, an increase of $23.0 million or 6.54%. Money Markets deposits increased $32.6 million while DDA decreased by $9.6 million. Certificates of deposit increased to $409.6 million from $356.2 million at December 31, 2008, an increase of $53.4 million or 14.99%. The large increase in certificates of deposit is the result of marketing promotions during the first quarter, and the use of the CDARS program as a cost effective alternate funding source to borrowings. At March 31, 2009 CDARS deposits specifically used as an alternative funding source totaled $29.8 million.

At March 31, 2009, Cape Bancorp’s total borrowings decreased to $168.1 million from $234.5 million at December 31, 2008, a decrease of $66.4 million or 28.32% which was facilitated by the increase in deposits.

Cape Bancorp’s total equity increased to $141.2 million at March 31, 2009 from $140.7 million at December 31, 2008, an increase of $500 thousand or .36%. This slight increase is attributable to an improvement in accumulated other comprehensive loss of $500 thousand, net of tax. At March 31, 2009, stockholders’ equity declined to 12.77% of total assets from 12.90% at December 31, 2008. Tangible equity totaled $117.9 million or 10.89% of period end tangible assets, a decrease from 10.99% at December 31, 2008. Tangible book value per share at March 31, 2009 was $8.86 compared to $8.81 at December 31, 2008.

Michael D. Devlin, President and Chief Executive Officer of Cape Bancorp and Cape Bank, provided the following statement:

“There was a change in leadership at the bank during the first quarter which impacted the organization both administratively and financially. In addition to the financial impact of the stresses associated with the national economy, the departure of the previous president generated a severance payment of $1.3 million. While there was some disruption due to the shift in management, Cape Bank is clearly focused on the tasks at hand.

“The principal focus of management continues to be the credit condition of the portfolio and the local economy. As a seasonal economy, the first and second quarters are traditionally a slow period which has been exacerbated by both the recession and the weakness in the gaming industry. Management monitors credit on a weekly basis and has been prompt in recognizing and acting upon troubled credits. While there have been some signs of slight improvement in the local economy in recent weeks, the success of the summer season will be of critical importance.

“Management is continuing with efforts to control costs and maximize the efficiencies from last year’s merger. While big strides have been made, further reductions are anticipated.

“Finally, Cape is considering a stock buyback plan and has applied for approval from the regulators to take the steps necessary to implement such a plan. The board has indicated that if approval is granted this plan will purchase shares to be retired and not to fund previously approved restricted stock plans. The bank hopes to have a resolution of this matter in the second quarter.”

CAPE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

	March 31,			December 31,
	2009			2008
	(in thousands)
ASSETS
Cash & due from financial institutions	$	12,176		$	10,117
Federal funds sold		—			—
Cash and cash equivalents		12,176			10,117
Interest-earning deposits in other financial institutions		10,332			17,918
Investment securities available for sale, at fair value (amortized cost of $133,185 at March 31, 2009 and $123,831 at December 31, 2008)		124,792			114,655
Investment securities held to maturity (fair value of $51,568 at March 31, 2009 and $49,938 at December 31, 2008)		50,337			48,825
Loans held for sale		576			—
Loans, net of allowance of $11,924 and $11,240		794,226			783,869
Accrued interest receivable		5,048			4,736
Premises and equipment, net		27,233			27,342
Other real estate owned		538			798
Federal Home Loan Bank (FHLB) stock, at cost		8,614			11,602
Deferred income taxes		17,557			17,247
Bank owned life insurance (BOLI)		26,701			26,446
Goodwill		22,575			22,575
Intangible assets		731			786
Assets held for sale		2,026			2,026
Other assets		2,248			1,793
Total assets	$	1,105,710		$	1,090,735
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest-bearing deposits	$	64,628		$	63,258
Interest-bearing deposits		725,718			647,872
Borrowings		168,058			234,484
Advances from borrowers for taxes and insurance		600			585
Accrued interest payable		827			778
Other liabilities		4,656			3,033
Total liabilities		964,487			950,010
Stockholders’ Equity
Common stock, $.01 par value: authorized 100,000,000 shares; issued and outstanding 13,313,521 shares		133			133
Additional paid-in capital		126,775			126,801
Unearned ESOP shares		(10,126	)		(10,232	)
Accumulated other comprehensive income (loss), net		(5,505	)		(6,022	)
Retained earnings		29,946			30,045
Total stockholders’ equity		141,223			140,725
Total liabilities & stockholders’ equity	$	1,105,710		$	1,090,735

CAPE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

	Three months ended March 31,
	2009			2008
	(dollars in thousands, except share data)
Interest income:
Interest on loans	$	11,627		$	11,048
Interest and dividends on investments
Taxable		855			1,235
Tax-exempt		345			268
Interest on mortgage-backed securities		1,116			903
Total interest income		13,943			13,454
Interest expense:
Interest on deposits		3,611			4,788
Interest on borrowings		1,596			1,429
Total interest expense		5,207			6,217
Net interest income before provision for loan losses		8,736			7,237
Provision for loan losses		745			283
Net interest income after provision for loan losses		7,991			6,954
Non-interest income:
Service fees		709			666
Net gains on sale of loans		27			19
Net income from BOLI		292			266
Net rental income		86			84
Gain/ (loss) on sales of investment securities available for sale, net		—			—
Other than temporary impairment		(1,539	)		—
Loss on disposal of other assets		—			—
Loss on sale of OREO		(29	)		—
Other		21			64
Total non-interest income		(433	)		1,099
Non-interest expense:
Salaries and employee benefits		4,727			3,353
Occupancy and equipment		856			743
Federal insurance premiums		854			152
Data processing		279			318
Charitable foundation contribution		—			6,256
Advertising		51			182
Telecommunications		202			175
Professional services		223			210
OREO write-down		68			—
Other operating		824			885
Total non-interest expense		8,084			12,274
Income (loss) before income taxes		(526	)		(4,221	)
Income tax expense (benefit)		(427	)		(1,975	)
Net income (loss)	$	(99	)	$	(2,246	)
Earnings (loss) per share (see Note 9):
Basic	$	(0.01	)	$	(0.22	)
Diluted	$	(0.01	)	$	(0.22	)
Weighted average number of shares outstanding:
Basic		12,296,879			12,311,190
Diluted		12,296,879			12,311,190

AVERAGE BALANCE SHEET
(unaudited)

	For the Three Months Ended March 31,
	2009								2008
				Interest								Interest
	Average			Income/		Average			Average			Income/		Average
	Balance			Expense		Yield			Balance			Expense		Yield
	(dollars in thousands)
Assets
Interest-earning deposits	$	15,022		$	66		1.76	%	$	7,116		$	74		4.18	%
Investments		187,947			2,250		4.79	%		172,004			2,332		5.45	%
Loans		800,169			11,627		5.89	%		677,393			11,048		6.56	%
Total interest-earning assets		1,003,138			13,943		5.64	%		856,513			13,454		6.32	%
Noninterest-earning assets		106,462								124,783
Allowance for loan losses		(11,340	)							(6,717	)
Total assets	$	1,098,260							$	974,579
Liabilities and Stockholders’ Equity
Interest-bearing demand accounts	$	104,083			107		0.42	%	$	107,782			309		1.15	%
Savings accounts		79,460			117		0.60	%		81,265			313		1.55	%
Money market accounts		117,055			428		1.48	%		109,975			904		3.31	%
Certificates of deposit		381,019			2,958		3.15	%		325,059			3,262		4.04	%
Borrowings		205,162			1,597		3.16	%		141,948			1,429		4.05	%
Total interest-bearing liabilities		886,779			5,207		2.38	%		766,029			6,217		3.26	%
Noninterest-bearing deposits		63,840								56,682
Other liabilities		6,230								3,502
Total liabilities		956,849								826,213
Stockholders’ equity		141,411								148,366
Total liabilities & stockholders’ equity	$	1,098,260							$	974,579
Net interest income				$	8,736							$	7,237
Net interest spread							3.26	%							3.06	%
Net interest margin							3.53	%							3.40	%
Net interest income and margin (tax equivalent basis) (1)				$	8,892		3.59	%				$	7,352		3.45	%
Ratio of average interest-earning assets to average interest-bearing liabilities		113.12	%							111.81	%

(1) In order to present pre-tax income and resultant yields on tax-exempt investments on a basis comparable to those on taxable investments, a tax equivalent yield adjustment is made to interest income. The tax equilvalent adjustment has been computed using a Federal income tax rate of 34%, and has the effect of increasing interest income by $156,000, and $115,000 for the three month period ended March 31, 2009 and 2008, respectively. The average yield on investments increased to 5.19% from 4.79% for the three month period ended March 31, 2009 and increased to 5.78% from 5.45% for the three month period ended March 31, 2008.

SELECTED FINANCIAL DATA
(unaudited)

	Three Months Ended
	March 31, 2009			December 31, 2008			March 31, 2008
	(dollars in thousands, except per share data)
Statements of Income Data:
Interest income	$	13,943		$	14,471		$	13,454
Interest expense		5,207			5,664			6,217
Net interest income		8,736			8,807			7,237
Provision for loan losses		745			6,860			283
Net interest income after provision for loan losses		7,991			1,947			6,954
Non-interest income		(433	)		(11,997	)		1,099
Non-interest expense		8,084			38,251			12,274
Income (loss) before income taxes		(526	)		(48,301	)		(4,221	)
Income tax expense (benefit)		(427	)		(6,125	)		(1,975	)
Net income (loss)	$	(99	)	$	(42,176	)	$	(2,246	)
Earnings (loss) per share	$	(0.01	)	$	(3.43	)	$	(0.22	)1
Average shares outstanding		12,296,879			12,285,267			12,311,190
Statements of Condition Data (Period End):
Investments	$	175,129		$	163,480		$	199,816
Loans, net of allowance		794,226			783,869			789,957
Allowance for loan losses		11,924			11,240			8,175
Total assets		1,105,710			1,090,735			1,160,942
Total deposits		790,346			711,130			788,892
Total borrowings		168,058			234,484			180,304
Total equity		141,223			140,725			186,364
Operating Ratios:
ROAA		-0.04	%		-14.94	%		-0.92	%
ROAE		-0.28	%		-96.08	%		-6.03	%
Net interest margin		3.53	%		3.52	%		3.40	%
Efficiency ratio		82.13	%		382.55	%		147.25	%
Equity to assets (end of period)		12.77	%		12.90	%		16.05	%
Tangible equity/tangible assets		10.89	%		10.99	%		11.86	%
Non-performing loans to total gross loans		3.73	%		2.65	%		1.82	%
Allowance for loan losses to non-performing loans		39.67	%		53.39	%		56.16	%
Allowance for loan losses to total gross loans		1.48	%		1.41	%		1.02	%
Book value	$	10.61		$	10.57		$	14.00
Tangible book value	$	8.86		$	8.81		$	9.85
Stock price	$	7.03		$	9.25		$	9.74
Price to book value		66.26	%		87.51	%		69.57	%
Price to tangible book value		79.35	%		104.99	%		98.88	%

¹ Earnings Per Share calculation in 2008 excludes $401,658 from year-to-date net income. This amount represents income earned by Cape Savings Bank (now Cape Bank) prior to the formation of Cape Bancorp. Earnings Per Share calculations use average outstanding shares which includes earned ESOP shares.

DELINQUENCY TABLE
(unaudited)

Period Ending:	March 31, 2009							December 31, 2008
Days	Balances		% of Total Loans			# of Loans		Balances		% of Total Loans			# of Loans
31-59	$	3,603,350		0.45	%		27	$	5,938,319		0.75	%		34
60-89	$	3,474,655		0.43	%		23	$	6,277,807		0.79	%		22
90+	$	30,061,971		3.73	%		76	$	21,047,651		2.65	%		60
Total Delinquency	$	37,139,976		4.61	%		126	$	33,263,777		4.18	%		116
Total Gross Loans Total	$	806,150,079						$	795,109,112

Days	Commercial			Consumer			Mortgage			Commercial			Consumer			Mortgage
31-59	$	1,940,622		$	575,557		$	1,087,170		$	2,642,290		$	514,190		$	2,781,839
60-89	$	2,054,939		$	215,322		$	1,204,394		$	6,050,199		$	122,274		$	105,334
90+	$	26,167,509		$	391,111		$	3,503,351		$	18,895,917		$	338,547		$	1,813,187
Total Delinquency by Type	$	30,163,070		$	1,181,990		$	5,794,915		$	27,588,406		$	975,011		$	4,700,360
Total Loans by Type	$	517,746,676		$	48,034,272		$	240,369,131		$	510,965,814		$	48,350,426		$	235,792,872
% of Total Loans in Type		5.83	%		2.46	%		2.41	%		5.40	%		2.02	%		1.99	%
Total Delinquency				$	37,139,975								$	33,263,777

For further information contact Michael D. Devlin, Chief Executive Officer, or Guy Hackney, Chief Financial Officer, Cape Bancorp: (609) 465-5600.

This press release discusses primarily historical information. Statements included in this release, to the extent they are forward-looking, involve a number of risks and uncertainties such as competitive factors, economic conditions and regulatory changes in the banking industry. Further information on factors that could affect Cape Bancorp’s financial results can be found in the Cape Bancorp’s Form 10-K for the Year Ended December 31, 2008, which was filed by Cape Bancorp with the Securities and Exchange Commission on March 16, 2009.