Exhibit 99.1
CCBT Financial Companies, Inc. Report
2003 Second Quarter and Year-to-Date Earnings
SOUTH YARMOUTH, Mass.--(BUSINESS WIRE)--July 17, 2003--CCBT
Financial Companies, Inc. (NASDAQ: CCBT) Chief Executive Officer and
President Stephen B. Lawson announced second quarter 2003 earnings of
$4.4 million, or $.52 per share, as compared to $4.5 million, or $.52
per share, earned in the same prior year period. As recently
announced, the Company's 2003 second quarter earnings benefited from
the settlement of the REIT tax issue with the Massachusetts DOR. This
benefit was partially offset by net securities losses in our
investment securities portfolio and continued margin compression
resulting from the low rate interest environment.
As reported on June 23, 2003, in our settlement of the REIT tax
issue with the Massachusetts DOR, the Company recognized a reduction
of income tax and related interest expense of approximately $2.5
million or $.30 per share. The Company recorded a net loss of $1.7
million on securities, comprised of $366,000 of losses on sales of
securities and an impairment loss of $1.3 million on an asset-backed
security. The 45-year low in the Federal Open Market Committee
targeted federal funds rate and resulting low rate environment has
caused the Company's earning asset yields to continue to decline.
Combining this with our high level of demand deposits and lower rate
interest bearing deposits, second quarter 2003 net interest income
declined $2.5 million compared with the comparable prior year period.
The loss on securities and decrease in net interest income partially
offset the benefit from the REIT settlement.
Excluding the net loss on securities and sales of loans
aggregating $1.0 million, non-interest income for the second quarter
of 2003 was $5.2 million, effectively unchanged from $5.3 million for
the comparable 2002 period. However, non-interest income from
financial service products (financial advisory, brokerage and
insurance sales) rose from $2.7 to $3.2 million or a 19% increase,
after excluding the $398,000 adjustment in the second quarter of 2002
for the one-time recognition of deferred insurance commissions.
Operating expenses for the quarter decreased $1.5 million as a
one-time expense of $506,000 was recorded in the second quarter of
2002 to fund an early retirement plan, while in the second quarter of
2003, other expenses benefited from the $359,000 reversal of interest
expense from the REIT settlement.
The return on average equity for the second quarter of 2003 was
15.97% compared to 15.48% for the same quarter in 2002. The average
return on assets for the second quarter of 2003 was 1.35% compared to
1.31% for the same period of 2002.
For the six months ended June 30, 2003, the Company reported
earnings of $2.9 million, or $.34 per share, as compared to $9.6
million, or $1.11 per share in the same prior year period. The REIT
adjustment for taxes and interest of $2.6 million, the decrease in
combined net gain on securities and sale of loans of $3.2 million, and
the $3.7 million decrease in net interest income are the major factors
contributing to the decline in earnings for the six-month comparable
periods. Non-interest income from financial service products
(financial advisory, brokerage and insurance sales) increased from
$5.2 to $6.2 million or a 20% increase, after excluding the $398,000
adjustment in the second quarter of 2002 for the recognition of
deferred insurance commissions.
The return on average equity year to date was 5.16% compared with
16.50% in the same period of 2002. The return on average assets for
the year to date was 0.44%, down from 1.37% for the same period of
2002.
Mr. Lawson commented, "Our efforts to increase non-interest income
through growing fee-based revenues is reflected in the 19% and 20%
increase in financial service based products when comparing the
quarter and six months ended June 30, 2003 to the same periods last
year. In line with this strategy, we have recently announced the
closing of nine transaction locations in Stop & Shop supermarkets,
while expanding our full service financial offices and extending their
hours of operation. All of CCBT's offices will be capable of providing
our customers with the full range of financial offerings including
banking, investment, brokerage, insurance, tax, estate and trust
services.
The shift by residential mortgage borrowers from adjustable-rate
to fixed-rate mortgages, which are sold into the secondary mortgage
market, the reduction in the investment portfolio and solid growth in
core-deposits was matched with a like reduction in both short and
long-term borrowings resulting in a decrease in total assets from
$1.45 billion at June 30, 2002 to $1.28 billion at June 30, 2003.
Loans, excluding residential and consumer, were $558.8 million, up
from the $533.3 million one year ago, a $25.5 million or 4.8%
increase. This loan growth was principally funded by a 5.7% increase
in deposits from $923.4 million to $975.8 million at June 30, 2002 and
2003, respectively. Total non-performing assets declined from $2.8
million to $2.3 million at June 30, 2002 and 2003, respectively. The
allowance for loan losses was $12.7 million on June 30, 2003, up
modestly from $12.4 million a year ago. The capital to assets ratios
stand at 8.8% and 8.4%, respectively, at June 30, 2003 and 2002. With
our strong capital base, CCBT Financial Companies, Inc. recently
declared a $0.19 quarterly dividend to be paid July 31, 2003 to
stockholders of record July 21, 2003. In the first quarter of this
year, we also authorized the repurchase, from time to time based on
market conditions, of an additional 200,000 shares of common stock, of
which approximately 15,000 shares have been repurchased as of June 30,
2003.
We expect that weak domestic and global economic activity will
continue to keep interest rates low and maintaining net interest
income presents a challenge to us as a significant portion of our
liabilities have limited repricing opportunity. We are pleased with
the positive results in the growth of our deposits and commercial
lending capabilities while increasing our fee revenues from financial
services products. We are continuing to pursue our strategy of
providing a wide range of financial services to our market area from
under one roof while maintaining a strong capital position and asset
quality."
CCBT Financial Companies, Inc. is a bank holding company with
total assets of $1.3 billion on June 30, 2003. Its subsidiary, Cape
Cod Bank and Trust Company, N.A., owns CCBT Brokerage Direct and a 51%
interest in Murray & MacDonald Insurance Services, Inc. The Company
offers a wide range of financial products and services including
deposit services, loans, municipal services, insurance, trust,
investments and retirement services to individuals, municipalities and
businesses. To find out more about CCBT Financial Companies, Inc. and
our services, please visit our web site at www.ccbt.com or better yet,
stop in for a visit at one of our thirty-four branch locations.
This report may contain statements that are not historical facts
and are considered forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements
relate to, among other things, future financial results of the
Company. You should not rely on forward-looking statements because the
Company's actual results may differ materially from those indicated by
these forward-looking statements as a result of a number of important
factors. These factors include, but are not limited to, changes in
prevailing interest rates, which may reduce interest margin, changes
in national and local economic conditions and equity and fixed income
market fluctuations. Reference is made to the Company's filings on
Forms 10-K with the Securities and Exchange Commission for factors
that could cause actual results to differ materially from those
anticipated.
Our Form 10-K filing with the SEC, which is available on our web
site will contain more detailed financial information.
ASSETS ($000) 06/30/03 12/31/02 06/30/02
Cash & cash equivalents 85,204 60,798 54,068
Securities available for sale 346,752 510,837 431,144
Other securities 24,738 24,738 24,738
Construction loans 101,306 99,544 100,581
Commercial mortgages 286,827 283,458 276,285
Commercial loans 98,349 84,882 93,835
Residential mortgages 211,816 262,095 356,339
Home equity loans 72,328 65,794 62,600
Other consumer loans 5,116 5,629 6,110
Total portfolio loans 775,742 801,402 895,750
Loans held for sale 11,074 37,332 2,567
Loan loss reserve (12,680) (12,384) (12,387)
Goodwill 803 803 1,056
Other intangibles 5,078 5,511 6,116
Total intangible assets 5,881 6,314 7,172
Mortgage servicing rights 2,620 2,088 1,627
Real estate owned 1,500 1,500 1,500
Other assets 41,351 49,258 43,233
Total assets 1,282,182 1,481,883 1,449,412
LIABILITIES ($000)
Savings/NOW accounts 278,274 259,587 239,612
Money market deposits 286,030 294,295 278,768
Other consumer time 118,023 121,961 131,703
Time deposits over $100,000 38,882 37,344 40,089
Short-term borrowings 52,798 227,091 231,919
Long-term borrowings 130,758 170,750 152,149
Total interest-bearing liab. 904,765 1,111,028 1,074,240
Demand deposits 254,545 229,033 233,186
Minority interest 282 234 293
Other liabilities 9,611 23,141 20,051
Total liabilities 1,169,203 1,363,436 1,327,770
EQUITY ($000)
Common equity 112,979 118,447 121,642
Net unrealized loss
on AFS securities (1,978) (1,018) 2,579
Book value per share 13.43 13.79 14.09
Common shares issued 9,061,064 9,061,064 9,061,064
Treasury shares (650,366) (470,266) (425,016)
Common shares outstanding 8,410,698 8,590,798 8,636,048
INCOME STATEMENT ($000) 2nd 2nd YTD 03 YTD 02
Quarter Quarter
03 02
Interest income 15,012 19,717 31,064 38,914
Interest expense 4,427 6,630 9,664 13,815
Net interest income 10,585 13,087 21,400 25,099
Net interest income (FTE) 10,660 13,160 21,560 25,281
Loan loss provision 0 0 0 0
(Loss) gain on securities (1,692) 962 (1,692) 2,641
Financial advisor fees 2,021 1,746 3,940 3,466
Service charge on deposits 632 567 1,215 1,125
Gain on sale of loans 657 500 2,165 1,076
Other noninterest income 2,523 3,004 5,198 5,180
Total noninterest income 4,141 6,779 10,826 13,488
Employee salaries and benefits 6,146 7,025 12,348 13,164
Occupancy and equipment 1,680 1,598 3,187 3,062
Foreclosed property expense 2 36 35 65
Amortization of intangibles 339 324 645 649
Deposit insurance expense 40 41 83 82
Other noninterest expense 3,078 3,848 7,208 7,022
Total noninterest expense 11,285 12,872 23,506 24,044
Net income before taxes 3,441 6,994 8,720 14,543
Tax provision (967) 2,459 5,793 4,961
Net income 4,408 4,535 2,927 9,582
Basic EPS 0.52 0.52 0.34 1.11
Diluted EPS 0.52 0.52 0.34 1.11
Dividends per common share 0.19 0.19 0.38 0.38
Avg shares for basic EPS 8,451 8,630 8,507 8,626
Avg shares for diluted EPS 8,469 8,671 8,526 8,664
AVE. BALANCE SHEET ($000) 2nd 2nd YTD 2003 YTD 2002
Quarter Quarter
03 02
Taxable securities 425,515 418,411 453,598 429,804
Tax-exempt securities 22,455 13,488 23,014 18,466
Total portfolio loans 768,342 885,046 780,739 880,420
Loans held for sale 13,138 3,254 12,006 4,478
Other earning assets 0 0 0 0
Total earning assets 1,229,450 1,320,199 1,269,357 1,333,168
Total assets 1,303,279 1,384,828 1,339,233 1,400,396
Savings/NOW accounts 266,166 230,586 261,807 226,443
Money market deposits 294,868 277,711 292,642 274,689
Other consumer time 119,037 136,803 119,496 141,499
Time deposits over $100,000 39,658 41,619 38,557 44,959
Total interest-bearing
deposits 719,729 686,719 712,502 687,590
Short-term borrowings 108,001 207,507 157,582 222,859
Long-term borrowings 128,728 148,761 126,986 156,495
Total interest-bearing liab. 956,458 1,042,987 997,070 1,066,944
Demand deposits 225,466 215,478 221,248 207,483
Minority interest 261 106 253 53
Other liabilities 10,681 9,066 7,114 9,765
Total liabilities 1,192,866 1,267,637 1,225,685 1,284,245
Common equity 110,413 117,191 113,548 116,151
Return on average assets 1.35% 1.31% 0.44% 1.37%
Return on average equity 15.97% 15.48% 5.16% 16.50%
CHARGEOFFS ($000) 2nd 2nd YTD 03 YTD 02
Quarter Quarter
03 02
Loan chargeoffs (14) (26) (36) (53)
Recoveries 98 77 332 188
Net loan charge-
offs(recoveries) (84) (51) (296) (135)
ASSET QUALITY ($000) 06/30/03 06/30/02 12/31/02
Nonaccrual loans 845 1,266 1,348
Renegotiated loans 259 220 210
Other real estate owned 1,500 1,500 1,500
Total nonperforming assets 2,345 2,766 2,848
SUPPLEMENTAL DATA 06/30/03 06/30/02 12/31/02
Loans serviced f/others ($000) 394,966 230,389 322,085
FTE employees 407 401 402
Number of full service offices 34 31 34
Number of subsidiaries 2 2 2
Number of ATM's 42 38 42
CONTACT: CCBT Financial Companies, Inc.
Phillip W. Wong, 508-760-8306