Cape Bank Announces Results, New Director

COURT HOUSE – On Friday, Feb. 14 Cape Bancorp, the parent company of Cape Bank, announced its quarterly and yearly operating results as well as a new nomination for its board of directors.
The bank reported a loss of $35.4 million, or $2.88 per share, for the quarter ending Dec. 31, 2008. According to a release, the loss was largely the result of an impairment charge of $31.8 million following a merger of Cape Savings Bank and Boardwalk Bank last year. The charge had no impact on Cape Bank’s capital levels, regulatory capital ratios or liquidity, the release stated.
For the year, Cape Bancorp had a net loss of $35.7 million or $2.94 per share. The bank’s assets decreased to $1.091 billion from $1.128 billion at Sept. 30, a decrease of $37 million or 3.28 percent again because of the impairment charge.
At the end of the year, Cape Bancorp had $21 million in non-performing loans, or 2.64% of total gross loans, down from $22.3 million or 2.83% of total gross loans at the end of the previous quarter.
Michael D. Devlin, recently appointed President and Chief Executive Officer of Cape Bancorp and Cape Bank, provided the following statement:
“The results of the fourth quarter were adversely impacted by both the non-cash impairment charge and losses related to the credit portfolio. In addition to the well publicized national financial crisis, the local economy is suffering through the first recession in which the gaming industry is also negatively impacted. While Cape Bank has no loans directly to the gaming companies, the repercussions are affecting many sectors of the local community, and we believe the negative impact is yet to be fully realized.
Management has taken steps to carefully review the bank’s credit relationships and the announced charge offs and allowance increases are the result of those efforts. Despite this, we believe that there are no indications that the local economy has reached a bottom and we expect a difficult economy at least until the summer season begins and our local businesses return to more normal cash flows.
While maintaining credit discipline will be a major emphasis to protect and enhance shareholder value, management also believes that a sensible capital management program is an important part of planning for the future of the bank. We opted not to participate in the TARP program due to our healthy capital position, concerns about the costs of this capital, and uncertainty about potential limitations that could be imposed on Cape Bank. Stock valuations that frequently trade below tangible book values make consideration of a stock buyback program an important consideration for the institution.
In spite of the negative economy, Cape Bank has much to offer. Our branch network covers our market effectively and our professional staff boasts detailed knowledge of this market and our customers. Capital, network and talented employees will enable Cape Bank to secure value for our shareholders as opportunities arise.”
Cape Bank also announced Friday that James J. Lynch, a founding partner of Patriot Financial Partners and a former Vice Chairman of Sovereign Bancorp, has been nominated to serve as a Director of both Cape Bancorp and Cape Bank.
According to a releasse, Lynch, a skilled banking veteran in the Greater Philadelphia region with more than 39 years of experience, has been nominated to serve a two-year term as Director, subject to the approval of the institutions’ stockholders at its annual meeting this April. Patriot Financial Partners, a private equity investment fund focusing on investments in the community banking industry throughout the nation, owns approximately 6.6 percent of Cape’s common stock.
“We are delighted to have someone with Jim Lynch’s level of expertise and experience joining the boards of Cape Bancorp and Cape Bank,” said Michael D. Devlin, President and CEO. “Over four decades, Jim has developed a level of knowledge and experience in the industry that can be put to great use for the benefit of Cape’s stockholders and customers. We look forward to having him with us.”
Lynch’s nomination as a Director represents another milestone in the growth of Cape Bank as an emerging regional power in the banking industry. In the last 18 months, following the transition of the former Cape Savings Bank from a mutual to a stock organization, and Cape’s simultaneous acquisition of Boardwalk Bank in January 2008, Cape Bank has become the largest bank headquartered in Cape May and Atlantic counties, which includes 18 branches and approximately $1.1 billion in assets.
Prior to Patriot, Lynch served as Vice Chairman of Sovereign Bancorp from 2005 to 2007, and as Chairman and CEO of Sovereign’s Mid-Atlantic Division from 2002 to 2007. In 2001 and 2002, Lynch served as President and Chief Executive Officer of Fleet Bank in Pennsylvania and Southern New Jersey. From 1999 to 2001, Lynch was the Chairman and CEO at Summit Bank in Pennsylvania, and Senior Executive Vice President at Summit Bancorp. Before that, he was Chairman, President and CEO of Prime Bank; President and Vice Chairman of Continental Bancorp; and Executive Vice President of Midlantic Bank (formerly Continental Bank).
A graduate of LaSalle University in Philadelphia, Lynch is a longtime member and immediate past Chairman of the University’s Board of Trustees. He has also been inducted into the Father Judge High School and the Archdiocese of Philadelphia, Catholic Youth Organization Hall of Fame.
Lynch is active in several professional and civic organizations. He is a board member and trustee of the Holy Redeemer Health System, and also a board member of the Police Athletic League in Philadelphia. He is an immediate past chairman of the Central Philadelphia Development Corporation and an active member of the corporate campaign for the United Way of Southeastern Pennsylvania. Lynch also serves as a board member for the Special Olympics – Pennsylvania, as well as The Reinvestment Fund (TRF). He is a founding board member of LaSalle Academy, a private inner city elementary school serving economically disadvantaged children in Philadelphia.
Lynch’s banking expertise and record of community service have earned him numerous awards, including: the Richard J Caron Award of Excellence from the Caron Foundation; the Boys and Girls Club of Philadelphia Touching a Life Award; the Philadelphia Eagles Fly for Leukemia Lifetime Achievement Award. He also was named Banker of the Year by the Philadelphia chapter of the Risk Management Association for his contributions to the commercial lending profession.
Lynch and his wife, Kathleen, live in Lafayette Hill, Pa.