CCBI Commercial Capital Bancorp

Commercial Capital Bancorp, Inc. (NASDAQ:CCBI): -- Record Total Assets of $5.46 Billion, a 9% Increase from Fourth Quarter 2004 -- Record Total Loan Fundings of $716.0 Million, a 32% Increase from Fourth Quarter 2004 -- Earnings of $0.26 Per Share on Net Income of $15.1 Million -- Non-GAAP Earnings of $0.29 Per Share on Net Income of $16.4 Million Commercial Capital Bancorp, Inc. (NASDAQ:CCBI), the parent company of Commercial Capital Bank, TIMCOR Exchange Corporation and North American Exchange Company, today announced net income of $15.1 million or $0.26 per diluted share for the fourth quarter of 2005, declines of 25% and 28%, respectively, from the fourth quarter of 2004. Excluding the direct costs of the Commercial Banking Division, the Company generated Non-GAAP net income of $16.4 million or $0.29 per diluted share during the fourth quarter of 2005. Net income totaled $74.3 million or $1.29 per diluted share for 2005, compared to $56.3 million or $1.21 per diluted share for 2004. The financial results for the fourth quarter of 2005 reflect the successful implementation of the Company's core growth strategy. -- Total assets grew to a record $5.46 billion at December 31, 2005, an increase of $439.6 million from December 31, 2004. The growth in assets during the quarter was generated by the Bank's strong fundings of multifamily, commercial real estate and construction loans. -- Record loan fundings of $716.0 million were achieved during the fourth quarter of 2005, an increase of 32% over the fourth quarter of 2004. -- Total revenues in the fourth quarter of 2005 reached $75.2 million, the highest level for any quarter in the Company's history. -- 1031 exchange balances averaged $701.8 million for the fourth quarter of 2005, reflecting the acquisitions of TIMCOR and NAEC in February and May of 2005, respectively. Exchange balances had an average cost of 0.86% for the fourth quarter of 2005. -- The Company announced signing of an agreement to acquire Calnet Business Bank, National Association, a Sacramento, California-based community bank with total assets of $176.6 million, total deposits of $152.9 million and total shareholders' equity of $22.7 million at December 31, 2005. The acquisition is expected to close in the first quarter of 2006. The comparability of the Company's quarterly results is affected by the acquisitions that occurred in mid-2004 and early 2005. The Company's operating results from the fourth quarter of 2005 include the operations of TIMCOR and NAEC which were acquired earlier in 2005. While the operations of these companies are included in the 2005 results, they are not reflected in comparable 2004 results. Additionally, Hawthorne Financial Corporation was acquired in June 2004. Stephen H. Gordon, Chairman and Chief Executive Officer of Commercial Capital Bancorp, Inc., commented, "Our fourth-quarter results reflect our continued strategy of growing our core businesses, removing non-core assets from our balance sheet and maturing and improving our depository franchise. We have completed the process of selling non-core residential loans that were identified in early 2005 and are now focused on growing our balance sheet through our multifamily and commercial origination platform. We are keenly focused on growth through funding high quality assets and on the expansion and improvement of our depository franchise." Gordon continued, "The fourth-quarter results were negatively impacted by the costs associated with the further development of the Bank's Commercial Banking Division. This division is an important part of our multi-pronged funding strategy and, notwithstanding the near term costs, we have begun to realize the potential contributions to the Company, with approximately $50 million of deposits contributed by the division during the quarter." -0- *T Fourth Quarter Financial Summary ($ in 000's, except per share data) 2005 2004 Change % Change -------- -------- -------- --------- Total revenues(i) $75,154 $67,083 $8,071 12.0% Net interest income 37,403 38,468 -1,065 -2.8 Non-interest income 6,066 6,690 -624 -9.3 G&A Expenses 20,532 12,705 7,827 61.6 Net income 15,101 20,234 -5,133 -25.4 Basic EPS 0.27 0.37 -0.10 -27.0 Diluted EPS 0.26 0.36 -0.10 -27.8 Yield on earning assets 5.93% 5.30% 0.63 11.9 Cost of funds 2.78 2.00 0.78 39.0 Net interest margin 3.21 3.38 -0.17 -5.0 Net interest margin, Non- GAAP(ii) 3.13 3.08 0.05 1.6 ROAA 1.15 1.61 -0.46 -28.6 ROAA - Tangible 1.24 1.73 -0.49 -28.3 ROAE 8.69 13.06 -4.37 -33.5 ROAE - Tangible 20.59 31.55 -10.96 -34.7 Efficiency ratio 47.23 28.13 19.10 67.9 G&A to total assets 1.56 1.01 0.55 54.5 Effective income tax rate 33.69 37.26 -3.57 -9.6 Core loan fundings(iii) $684,656 $495,730 $188,926 38.1 Total loan fundings(iv) 716,039 540,783 175,256 32.4 *T Operating Results The Company's net interest income during the fourth quarter totaled $37.4 million, a decrease of 3% from $38.5 million for the fourth quarter of 2004. The Company's yield on interest-earning assets increased 63 basis points to 5.93% for the fourth quarter of 2005, compared to 5.30% for the fourth quarter of 2004. Average interest-earning assets totaled $4.66 billion during the fourth quarter of 2005 as compared to $4.55 billion during the fourth quarter of 2004. The growth of average interest-earning assets was muted by the sale of non-core assets and the fourth quarter fundings being heavily weighted toward the end of the quarter. Average interest-bearing liabilities equaled $4.37 billion for the fourth quarter of 2005, an increase of $106.6 million over 2004. During the fourth quarter of 2005, $655.0 million of FHLB advances that originally were borrowed on extended maturity schedules at an average cost of 2.64% matured. These advances were replaced with sources at current market rates of interest. The maturity of these advances combined with rising short-term interest rates contributed to an increase in the Company's cost of funds during the fourth quarter of 2005. The Company's cost of funds was 2.78% during the fourth quarter of 2005, an increase of 78 basis points from the fourth quarter of 2004. Excluding purchase accounting adjustments related to the acquisition of Hawthorne, the Company's net interest margin expanded by five basis points year over year to 3.13% for the fourth quarter of 2005, from 3.08% for the fourth quarter of 2004. Noninterest income decreased by 9% to $6.1 million for the fourth quarter of 2005, from $6.7 million for the fourth quarter of 2004. The decrease in noninterest income is due primarily to a decrease in the gain on sale of loans, which totaled $534,000 for the fourth quarter of 2005, compared to $3.8 million for the fourth quarter of 2004. The gain on sale of loans for the fourth quarter of 2005 declined compared to the prior year period due to a lower volume of loan sales as the Company completed its programs to restructure its balance sheet and reduce non-core assets. The Company's general and administrative expenses totaled $20.5 million for the fourth quarter of 2005, compared to $12.7 million for the fourth quarter of 2004. The most significant increase in expenses was compensation costs, which was driven by a higher level of staffing during 2005. The acquisitions of TIMCOR and NAEC and the investment made in the expansion of the commercial banking efforts resulted in a significant increase in staff. The fourth quarter of 2005 includes approximately $2.3 million of direct expenses related to the Commercial Banking Division. This included approximately $1.1 million of salaries, benefits and other costs and $1.2 million of professional and legal costs associated with the start up of this division and the Company's defense in the previously disclosed related litigation. The Company's effective tax rate was 33.69% for the fourth quarter of 2005, compared to 37.26% for the fourth quarter of 2004. The reduction of the Company's effective tax rate for the fourth quarter of 2005 compared to the fourth quarter of 2004 results primarily from the Company's strategy of investing in qualified low income community investments under the New Markets Tax Credit provisions of the Internal Revenue Code of 1986, as amended. The Company continues to benefit from prior year investments in similar tax credits, as well as tax benefits from funding loans in tax enterprise zones. Asset Strategy Total assets increased to a record $5.46 billion at December 31, 2005, compared to $5.02 billion at December 31, 2004. During 2005, the Company employed a strategy to increase its focus on multifamily and commercial real estate loans and reduce the level of single family residential loans in its portfolio. In the first quarter of 2005, the Bank identified and designated $611.6 million of low rate, super jumbo, single family adjustable rate loans as held for sale. The Bank continues to originate single family residential loans, but intends to identify as held for sale those single family residential loans that do not meet its profitability criteria. During 2005, these asset strategies resulted in the sale of $731.1 million of single family residential loans from the Bank's portfolio and 2005 originations. The composition of the balance sheet at December 31, 2005 reflects the results of these strategies. Total loans increased to $4.34 billion at December 31, 2005, an increase of $420.8 million over the levels at December 31, 2004, with multifamily loans held for investment totaling $3.05 billion and representing 70% of total loans held for investment at December 31, 2005. Multifamily loans totaled $2.40 billion, and represented 61% of total loans at December 31, 2004. The current and ongoing strategy of the Company will continue to focus on the funding of adjustable rate multifamily and commercial real estate loans that are indexed to the 12 MAT and other market indices. At December 31, 2005, 97% of the loan portfolio was adjustable rate loans and 56% of adjustable rate loans were based upon the 12MAT. Although the Company is focused on the funding of adjustable rate loans, the Company does not hold a significant amount of loans subject to negative amortization at December 31, 2005. As a result, the Company had less than $1.0 million of negative amortization balances as of December 31, 2005. Loan Fundings The Company's lending efforts are focused on adjustable rate multifamily and commercial real estate loans. The strategy emphasizes loans originated through an in-house lending team of professionals in order to ensure that the customer relationship is maintained and that strict standards of credit quality are maintained. Purchasing loans and using third party mortgage brokers are part of the overall funding and portfolio growth strategy. During the fourth quarter of 2005, $570.4 million of core loans were originated, $114.3 million were purchased and $31.4 million were originated through broker or conduit relationships. These figures compare favorably to the fourth quarter of 2004 during which the Bank originated core loans of $495.7 million and originated $45.1 million of loans through broker or conduit relationships. David S. De Pillo, President and Chief Operating Officer, observed, "California continues to experience population expansion and the demand for affordable housing has led to continued strong demand for our loan products. Our loan origination franchise has built strong relationships and we are one of the strongest competitors in the multifamily niche. We have grown to being one of the leading multifamily lenders in the state of California and we have the capacity to continue to grow. If concerns regarding the affordability of single family residences should prove to be realized, we feel that we are well positioned to provide loan products to fill the need for affordable housing that should be attractive to real estate developers and investors who are seeking loan products and services." PORTFOLIO ASSET QUALITY The level of nonperforming assets has been relatively low over recent quarters and the fourth quarter of 2005 proved to be consistent with that trend. Nonperforming assets totaled $8.6 million or 0.16% of total assets at December 31, 2005. This compares with nonperforming assets of $6.6 million or 0.13% of total assets at December 31, 2004. Nonperforming assets are typically comprised of loans on nonaccrual status, loans that have been restructured and real estate acquired through foreclosure. The Company's internal asset review process evaluates the adequacy of its allowance for loan losses on a quarterly basis. At December 31, 2005, the allowance for loan losses was $28.7 million, which is 335% of nonperforming loans and 0.66% of total loans. The Company's review of its allowance for loan losses at December 31, 2005 indicated that a provision for loan losses for the fourth quarter of 2005 was not required and that the allowance for loan losses is adequate to cover potential losses inherent in the loan portfolio. LIABILITY MANAGEMENT A key focus of the balance sheet funding strategy implemented throughout 2005 was to increase the utilization of lower costing funding sources. The acquisitions of TIMCOR and NAEC during 2005 were an outgrowth of this strategy and provided average exchange balances of $701.8 million for the fourth quarter of 2005 at an average cost of 0.86%. At December 31, 2005, exchange balances totaled $623.3 million, which reflects the inter-period cyclical nature of exchanges. Although reflected as borrowings on the Company's balance sheet, these funding sources are viewed as transaction account balances in the implementation of the Company's asset liability management strategy. Transaction account balances, which consist of deposits that may be withdrawn by depositors without notice and exchange balances, totaled $1.70 billion at December 31, 2005, an increase of $473.0 million or 38% from $1.23 billion December 31, 2004, respectively. The growth of the transaction account balances was the most significant factor in the increase in total liabilities to $4.77 billion at December 31, 2005, as compared to $4.40 billion at December 31, 2004. On October 20, 2005, the Company announced it had entered into a definitive agreement to acquire Calnet Business Bank, National Association. The all-stock transaction is valued at approximately $40 million and is expected to close in the first quarter of 2006. At December 31, 2005, Calnet had total assets of $176.6 million, total loans of $107.4 million, total deposits of $152.9 million and total shareholders' equity of $22.7 million. For the fourth quarter of 2005, Calnet's net interest margin expanded to 5.70%. Calnet conducts its Greater Sacramento Valley, relationship-driven deposit gathering and lending business from a single location in Sacramento. Calnet's lending programs focus on commercial real estate, construction and business loans within the Greater Sacramento Valley region. The closing of the Calnet acquisition by the Company is subject to approval by Calnet shareholders and the Office of Thrift Supervision, the Company's primary regulator. Gordon commented, "The expansion of our funding strategies reflects the Company's commitment to cost effective funds management and remains a primary focus of our core business strategy. We will be employing several strategies to achieve our objective. We will further mature and expand our commercial, relationship and retail banking efforts. We expect to expand our retail branch network and exchange accommodator business through organic and de novo growth and opportunistic acquisitions. The TIMCOR, North American and Calnet acquisitions are good examples of the type of acquisitions that the Company will focus on in the future. The recently announced signing of a definitive agreement to acquire Oakland, California based Lawyers Asset Management, with over $100 million of exchange balances, demonstrates our commitment to and success with this strategy." SHAREHOLDERS' EQUITY Stockholders' equity totaled $698.1 million at December 31, 2005, an increase of 11.7% from $625.2 million at December 31, 2004. Growth in the level of shareholders' equity has been driven by retained earnings and by shares used in the acquisition of TIMCOR. As part of the strategy to manage its shares outstanding, on October 12, 2005 the Company's Board of Directors approved a stock repurchase program which allows for up to $20 million of shares to be repurchased. This plan will begin upon the conclusion of the repurchase program authorized in January 2005, which has remaining authorization to repurchase 532,463 shares. During 2005, the Company repurchased 1,036,400 shares. The Company's Board of Directors declared a cash dividend of $0.075 per share for shareholders of record on February 15, 2006 to be paid on March 1, 2006. The capital ratios of the Bank continued to exceed federal regulatory requirements for classification as a "well-capitalized" institution. The Bank's core, tier one risk-based and total risk-based capital ratios are estimated to be 8.75%, 11.72% and 12.48% at December 31, 2005, respectively FORWARD GUIDANCE Stephen H. Gordon stated, "We view 2005 as a transition year for the Company; a year in which the Company restructured its portfolio, acquired new business lines and expanded its commercial banking efforts. We believe the successful maturation of these initiatives, when combined with our relationship and retail banking focus will improve the Company's franchise value. Looking forward to 2006, we will continue to look for strategic opportunities that provide synergistic, low cost transaction account balances and expand our depository franchise. We will look to build a nationwide platform for our 1031 exchange accommodator businesses and hope to build efficiencies from further growth. During 2006, we expect to grow our loan portfolio without compromising asset quality. We recognize the challenges of operating in a relatively flat or inverted yield curve environment. These and other factors lower the precision of accurately forecasting our businesses. We will continue to focus our core origination expertise on adjustable rate multifamily and commercial real estate lending and we have established an internal goal of growing total assets in the range of 20% to 25% during 2006. Despite the challenges, we remain confident in our business strategy and in our ability to continue to grow our lines of business profitably." CONFERENCE CALL AND WEBCAST INFORMATION Analysts, investors, and the general public may listen to the Company's discussion of its fourth quarter's earnings and performance and participate in the question/answer session by using the phone number listed below, or through a live video webcast of the conference available through a link on the home page of the Company's website at www.commercialcapital.com. The multimedia webcast enables conference participants to experience the conference with greater impact by simultaneously viewing the video broadcast as well as tables, charts, and speaker's notes. The webcast also allows participants to interact with the speakers through a live web-based question and answer session. Windows Media player is required for viewing the video webcast. It is recommended that participants dial into the conference call, or log into the webcast, approximately 5 to 10 minutes prior to the call. -0- *T Conference Call Date: Monday, January 23, 2006 Time: 7:00 a.m. PST (10:00 a.m. EST) Phone Number (800) 638-4930 International Dial In (617) 614-3944 Access Code: 65748596 Webcast Date: Monday, January 23, 2006 Time: 7:00 a.m. PST (10:00 a.m. EST) Webcast URL: www.commercialcapital.com Windows Media player is required *T Replay Information: for those who are unable to participate in the call or webcast live, an archive of the webcast will be available on the Company's website at www.commercialcapital.com beginning approximately 2 hours following the end of the call. A replay of the call will be available approximately 2 hours after the call's conclusion. To listen to the call replay dial (888) 286-8010, or for international callers dial (617) 801-6888, the access code for either replay number is 56896605. The webcast archive and call replay will be available until March 7, 2006. Commercial Capital Bancorp, Inc. is a diversified financial services company with $5.46 billion of total assets, at December 31, 2005. The Company provides depository and lending products and services under the Commercial Capital Bank brand name, and provides 1031 exchange services to income property investors nationwide under the TIMCOR Exchange Corporation and North American Exchange Company brand names. This release and the aforementioned conference call and webcast may include forward-looking statements related to the Company's plans, beliefs and goals, and its proposed acquisition of Calnet 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. With respect to its proposed Calnet acquisition, these risks and uncertainties include, but are not limited to governmental approval of the merger may not be obtained or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger and that the stockholders of Calnet may fail to provide the required approval to consummate the merger. The Company undertakes no obligation to revise or publicly release any revision to these forward-looking statements. This press release may be deemed to be solicitation material with respect to the proposed acquisition of Calnet and the issuance of shares of common stock by the Company pursuant to the merger. In connection with the proposed transaction, a registration statement on Form S-4 has been filed with the SEC. The registration statement contains a proxy statement/prospectus that has been distributed to the shareholders of Calnet in connection with their vote on the merger. SHAREHOLDERS OF CALNET ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS THAT IS PART OF THE REGISTRATION STATEMENT, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and security holders may obtain the documents free of charge at the SEC's website, www.sec.gov. In addition, investors may obtain free copies of the documents filed with the SEC by the Company by contacting: Investor Relations, Commercial Capital Bancorp, Inc., 8105 Irvine Center Drive, 15th Floor Irvine, CA 92618, telephone: 949-585-7500 or by visiting the Company's website at www.commercialcapital.com, or from Calnet by contacting Kevin R. Watson, Chief Financial Officer, Calnet Business Bank, 1565 Exposition Blvd., Sacramento, CA 95815, telephone: 916-927-7000 or by visiting Calnet's website at www.Calnetbank.com. -0- *T (i) Total revenue is defined as interest income plus noninterest income. (ii) Net interest margin, Non-GAAP excludes purchase accounting adjustments related to the acquisition of Hawthorne Financial Corporation. (iii) The Company defines core loan fundings to exclude those loans funded through its strategic alliance with Greystone Servicing Corporation, a Fannie Mae DUS lender, and the Company's other broker and conduit channels. (iv) The Company defines total loan fundings to include loans that are originated or purchased by the Company during the period. COMMERCIAL CAPITAL BANCORP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in Thousands) Dec. 31, 2005 Sept. 30, 2005 June 30, 2005 ---------------------------------------------------------------------- ASSETS Cash and Cash Equivalents $ 33,735 $ 69,112 $ 33,812 Securities Available For Sale 384,144 408,338 444,456 FHLB Stock 84,788 84,314 98,943 Loans Held for Investment Single Family 394,678 246,400 196,605 Multifamily 3,050,931 2,897,778 2,807,503 Commercial Real Estate 601,665 534,599 518,106 Construction 202,237 186,583 190,302 Land 74,948 48,414 43,946 -------------------------------------------- Total Real Estate Loans 4,324,459 3,913,774 3,756,462 Business and Other Loans 12,396 18,085 18,723 -------------------------------------------- Total Loans Held for Investment 4,336,855 3,931,859 3,775,185 Net Deferred Fees, Premiums and Discounts 3,427 319 (1,815) Allowance for Loan Losses (28,705) (28,723) (28,731) -------------------------------------------- Total Loans Held for Investment, Net 4,311,577 3,903,455 3,744,639 Loans Held for Sale 23,961 165,760 304,723 -------------------------------------------- Total Loans 4,335,538 4,069,215 4,049,362 Fixed Assets - Net 15,838 16,624 16,905 Foreclosed Assets - - - Accrued Interest Receivable 21,909 19,652 18,872 Goodwill 397,164 394,080 394,080 Core Deposit Intangible 5,251 5,414 5,576 Bank-Owned Life Insurance 114,409 93,290 47,525 Affordable Housing Investments 33,035 33,956 34,877 Other Assets 37,738 41,664 35,593 ---------------------------------------------------------------------- TOTAL ASSETS $ 5,463,549 $ 5,235,659 $ 5,180,001 ====================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Demand Deposits - Noninterest-Bearing $ 141,597 $ 140,185 $ 127,300 Demand Deposits - Interest-Bearing 71,386 74,063 74,941 Money Market Checking 348,137 212,637 243,337 Money Market Savings 372,230 438,313 313,158 Savings 147,386 173,481 218,573 --------------------------------------------- Total Transaction Deposits 1,080,736 1,038,679 977,309 Retail Time Deposits 1,028,546 1,001,281 939,410 Broker Time Deposits 150,800 55,845 115,895 --------------------------------------------- Total Time Deposits 1,179,346 1,057,126 1,055,305 --------------------------------------------- Total Deposits 2,260,082 2,095,805 2,032,614 Borrowings FHLB Advances 1,597,806 1,510,917 1,521,028 Exchange Balances 623,284 679,526 685,551 Junior Subordinated Debentures 149,962 150,107 150,253 Other Borrowings 72,000 69,000 65,000 --------------------------------------------- Total Borrowings 2,443,052 2,409,550 2,421,832 Other Liabilities 62,298 49,578 57,098 ---------------------------------------------------------------------- TOTAL LIABILITIES 4,765,432 4,554,933 4,511,544 STOCKHOLDERS' EQUITY 698,117 680,726 668,457 ---------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,463,549 $ 5,235,659 $ 5,180,001 ====================================================================== Mar. 31, 2005 Dec. 31, 2004 -------------------------------------------------------- ASSETS Cash and Cash Equivalents $ 78,775 $ 16,961 Securities Available For Sale 464,689 491,265 FHLB Stock 97,007 96,046 Loans Held for Investment Single Family 209,480 841,818 Multifamily 2,633,004 2,396,788 Commercial Real Estate 440,088 420,015 Construction 225,650 225,058 Land 50,182 56,308 ------------------------------- Total Real Estate Loans 3,558,404 3,939,987 Business and Other Loans 19,364 16,360 ------------------------------- Total Loans Held for Investment 3,577,768 3,956,347 Net Deferred Fees, Premiums and Discounts (4,798) (5,708) Allowance for Loan Losses (28,743) (36,835) ------------------------------- Total Loans Held for Investment, Net 3,544,227 3,913,804 Loans Held for Sale 612,549 976 ------------------------------- Total Loans 4,156,776 3,914,780 Fixed Assets - Net 16,419 10,318 Foreclosed Assets - - Accrued Interest Receivable 19,374 17,120 Goodwill 377,726 357,367 Core Deposit Intangible 5,739 5,902 Bank-Owned Life Insurance 47,081 46,277 Affordable Housing Investments 35,798 36,719 Other Assets 33,961 31,169 -------------------------------------------------------- TOTAL ASSETS $ 5,333,345 $ 5,023,924 ======================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Demand Deposits - Noninterest-Bearing $ 110,741 $ 97,931 Demand Deposits - Interest-Bearing 78,611 78,003 Money Market Checking 316,639 473,344 Money Market Savings 195,875 245,306 Savings 281,766 336,474 ------------------------------ Total Transaction Deposits 983,632 1,231,058 Retail Time Deposits 933,209 932,562 Broker Time Deposits 115,199 93,161 ------------------------------ Total Time Deposits 1,048,408 1,025,723 ------------------------------ Total Deposits 2,032,040 2,256,781 Borrowings FHLB Advances 2,015,338 1,856,349 Exchange Balances 370,202 - Junior Subordinated Debentures 150,398 135,079 Other Borrowings 61,000 101,000 ------------------------------ Total Borrowings 2,596,938 2,092,428 Other Liabilities 51,589 49,499 ------------------------------------------------------- TOTAL LIABILITIES 4,680,567 4,398,708 STOCKHOLDERS' EQUITY 652,778 625,216 ------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,333,345 $ 5,023,924 ======================================================= COMMERCIAL CAPITAL BANCORP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands) Three Months Ended --------------------------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 2005 2005 2005 2005 2004 ---------------------------------------------------------------------- Interest Income Loans $63,579 $60,148 $58,540 $55,905 $54,221 Securities 4,431 4,698 4,990 5,219 5,285 FHLB Stock 1,003 935 1,086 1,034 860 Fed Funds and Other 75 83 62 83 27 ---------------------------------------------- Total Interest Income 69,088 65,864 64,678 62,241 60,393 Interest Expense Deposits 15,175 12,852 10,861 9,874 9,174 FHLB Advances 11,656 10,139 10,923 11,145 10,717 Exchange Balances 1,527 1,552 1,147 341 - Junior Subordinated Debentures 2,644 2,481 2,307 2,043 1,770 Other Borrowings 683 575 515 504 264 ---------------------------------------------- Total Interest Expense 31,685 27,599 25,753 23,907 21,925 ---------------------------------------------- Net Interest Income 37,403 38,265 38,925 38,334 38,468 Recapture of Allowance for Loan Losses - - - (8,109) - ---------------------------------------------- Net Interest Income after Recapture of Allowance for Loan Losses 37,403 38,265 38,925 46,443 38,468 Noninterest Income Loan Related Fees 1,311 1,380 1,519 1,058 1,591 Retail Banking Fees 513 558 509 531 546 Mortgage Banking Fees 131 136 108 40 122 1031 Exchange Fees 1,301 1,620 1,347 374 - Gain on Sale of Loans 534 1,494 2,757 645 3,809 Gain on Sale of Securities - - - - - Other Income 2,276 2,246 658 1,100 622 ---------------------------------------------- Total Noninterest Income 6,066 7,434 6,898 3,748 6,690 Noninterest Expenses Compensation and Benefits 10,544 9,251 7,235 6,619 6,120 Non-Cash Stock Compensation 548 865 393 241 29 Occupancy and Equipment 2,206 2,219 2,052 2,159 2,096 Marketing 311 393 619 654 498 Technology 770 746 646 612 538 Professional and Consulting 1,847 2,482 694 498 440 Insurance Premiums and Assessment Costs 620 602 574 568 579 Merger-Related 13 - - - 282 (Recapture of) Provision for Reserve for Unfunded Commitments (2) 56 - (1,490) (416) Other Expenses 3,675 3,251 3,055 2,793 2,539 ---------------------------------------------- Total G&A Expenses 20,532 19,865 15,268 12,654 12,705 Early Extinguishment of Debt - - - - - Amortization of Core Deposit Intangible 163 163 162 163 203 ---------------------------------------------- Total Noninterest Expenses 20,695 20,028 15,430 12,817 12,908 ---------------------------------------------- Income Before Taxes 22,774 25,671 30,393 37,374 32,250 Income Tax Expense 7,673 8,835 11,068 14,287 12,016 ---------------------------------------------- Net Income $15,101 $16,836 $19,325 $23,087 $20,234 ============================================== COMMERCIAL CAPITAL BANCORP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands) Twelve Months Ended Dec. 31, 2005 Dec. 31, 2004 ---------------------------------------------------------------------- Interest Income Loans $ 238,173 $ 146,685 Securities 19,338 23,058 FHLB Stock 4,058 2,811 Fed Funds and Other 302 82 -------------------------------- Total Interest Income 261,871 172,636 Interest Expense Deposits 48,762 26,137 FHLB Advances 43,863 27,731 Exchange Balances 4,566 - Junior Subordinated Debentures 9,475 5,005 Other Borrowings 2,278 741 -------------------------------- Total Interest Expense 108,944 59,614 -------------------------------- Net Interest Income 152,927 113,022 Recapture of Allowance for Loan Losses (8,109) - -------------------------------- Net Interest Income after Recapture of Allowance for Loan Losses 161,036 113,022 Noninterest Income Loan Related Fees 5,268 5,194 Retail Banking Fees 2,112 1,347 Mortgage Banking Fees 416 566 1031 Exchange Fees 4,641 - Gain on Sale of Loans 5,429 4,022 Gain on Sale of Securities - 2,152 Other Income 6,281 1,806 -------------------------------- Total Noninterest Income 24,147 15,087 Noninterest Expenses Compensation and Benefits 33,649 17,930 Non-Cash Stock Compensation 2,047 117 Occupancy and Equipment 8,637 5,301 Marketing 1,977 1,602 Technology 2,774 1,375 Professional and Consulting 5,521 1,220 Insurance Premiums and Assessment Costs 2,365 1,697 Merger-Related 13 1,196 Recapture of Reserve for Unfunded Commitments (1,436) - Other Expenses 12,773 5,546 -------------------------------- Total G&A Expenses 68,320 35,984 Early Extinguishment of Debt - 1,204 Amortization of Core Deposit Intangible 651 464 -------------------------------- Total Noninterest Expenses 68,971 37,652 -------------------------------- Income Before Taxes 116,212 90,457 Income Tax Expense 41,863 34,195 -------------------------------- Net Income $ 74,349 $ 56,262 ================================ COMMERCIAL CAPITAL BANCORP, INC. Five Quarter Summary of Yields Earned and Rates Paid Three Months Ended --------------------------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 2005 2005 2005 2005 2004 --------------------------------------------- Interest-Earning Assets Loans 6.10% 5.88% 5.61% 5.46% 5.47% Securities 4.40 4.39 4.37 4.33 4.29 FHLB Stock 4.75 4.23 4.42 4.28 3.72 Cash and Cash Equivalents 3.37 3.46 2.69 2.37 2.21 --------------------------------------------- Total Yield on Interest- Earning Assets 5.93 5.70 5.46 5.31 5.30 Interest-Bearing Liabilities Transaction Accounts 2.48 2.17 1.85 1.69 1.66 Certificates of Deposits 3.45 3.03 2.62 2.24 1.76 FHLB Advances 3.19 2.74 2.51 2.33 2.19 Exchange Balances 0.86 0.88 0.85 0.76 - Junior Subordinated Debentures 6.99 6.55 6.15 5.71 5.21 Other Borrowings 4.06 3.52 2.99 2.51 2.01 --------------------------------------------- Cost on Interest-Bearing Liabilities 2.87 2.54 2.34 2.21 2.04 Cost of Funds 2.78 2.46 2.27 2.16 2.00 Interest Rate Spread 3.06 3.16 3.12 3.10 3.26 Net Interest Margin 3.21 3.31 3.28 3.27 3.38 COMMERCIAL CAPITAL BANCORP, INC. Average Balances, Net Interest Income, Yields Earned and Rates Paid (Dollars in Thousands) Three Months Ended --------------------------------------- Dec. 31, 2005 --------------------------------------- Average Interest Average Balance Yield/Cost --------------------------------------- Interest-Earning Assets: Total Loans(1) $ 4,167,744 $ 63,579 6.10% Securities(2) 402,661 4,431 4.40 FHLB Stock 84,456 1,003 4.75 Cash and Cash Equivalents(3) 8,904 75 3.37 ------------------------- Total Interest-Earning Assets 4,663,765 69,088 5.93 Noninterest-Earning Assets 602,356 ------------ Total Assets $ 5,266,121 ============ Interest-Bearing Liabilities: Deposits: Transaction Accounts(4) $ 918,067 5,730 2.48 Certificates of Deposits 1,087,314 9,445 3.45 ------------------------- Total Deposits 2,005,381 15,175 3.00 FHLB Advances 1,450,059 11,656 3.19 Exchange Balances 701,815 1,527 0.86 Junior Subordinated Debentures 150,057 2,644 6.99 Other Borrowings (5) 66,818 683 4.06 ------------------------- Total Interest-Bearing Liabilities 4,374,130 31,685 2.87 ------------ Noninterest-Bearing Deposits 147,346 Other Noninterest-Bearing Liabilities 49,887 ------------ Total Liabilities 4,571,363 Stockholders' Equity 694,758 ------------ Total Liabilities and Stockholders' Equity $ 5,266,121 ============ Net Interest-Earning Assets $ 289,635 ============ Net Interest Income/Interest Rate Spread $ 37,403 3.06% ========================== Net Interest Margin 3.21% ============= Three Months Ended ---------------------------------------- Dec. 31, 2004 ---------------------------------------- Average Interest Average Balance Yield/Cost --------------------------------------- Interest-Earning Assets: Total Loans(1) $ 3,965,200 $ 54,221 5.47% Securities(2) 492,297 5,285 4.29 FHLB Stock 92,491 860 3.72 Cash and Cash Equivalents(3) 4,880 27 2.21 ------------------------- Total Interest-Earning Assets 4,554,868 60,393 5.30 Noninterest-Earning Assets 475,741 ------------ Total Assets $ 5,030,609 ============ Interest-Bearing Liabilities: Deposits: Transaction Accounts(4) $ 1,084,645 4,534 1.66 Certificates of Deposits 1,049,900 4,640 1.76 ------------------------- Total Deposits 2,134,545 9,174 1.71 FHLB Advances 1,945,610 10,717 2.19 Exchange Balances - - - Junior Subordinated Debentures 135,175 1,770 5.21 Other Borrowings (5) 52,248 264 2.01 ------------------------- Total Interest-Bearing Liabilities 4,267,578 21,925 2.04 ------------ Noninterest-Bearing Deposits 98,828 Other Noninterest-Bearing Liabilities 44,302 ------------ Total Liabilities 4,410,708 Stockholders' Equity 619,901 ------------ Total Liabilities and Stockholders' Equity $ 5,030,609 ============ Net Interest-Earning Assets $ 287,290 ============ Net Interest Income/Interest Rate Spread $ 38,468 3.26% ========================== Net Interest Margin 3.38% ============= (1) The average balance of loans receivable includes loans held 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. (5) Consists of federal funds purchased. COMMERCIAL CAPITAL BANCORP, INC. Average Balances, Net Interest Income, Yields Earned and Rates Paid (Dollars in Thousands) Twelve Months Ended --------------------------------------- Dec. 31, 2005 --------------------------------------- Average Interest Average Balance Yield/Cost --------------------------------------- Interest-Earning Assets: Total Loans(1) $ 4,133,437 $ 238,173 5.76% Securities(2) 442,145 19,338 4.37 FHLB Stock 91,914 4,058 4.41 Cash and Cash Equivalents(3) 10,423 302 2.90 ------------------------- Total Interest-Earning Assets 4,677,919 261,871 5.60 Noninterest-Earning Assets 547,836 ------------ Total Assets $ 5,225,755 ============ Interest-Bearing Liabilities: Deposits: Transaction Accounts(4) $ 912,564 18,654 2.04 Certificates of Deposits 1,058,664 30,108 2.84 ------------------------- Total Deposits 1,971,228 48,762 2.47 FHLB Advances 1,649,162 43,863 2.66 Exchange Balances 533,120 4,566 0.86 Junior Subordinated Debentures 148,918 9,475 6.36 Other Borrowings (5) 70,555 2,278 3.23 ------------------------- Total Interest-Bearing Liabilities 4,372,983 108,944 2.49 ------------ Noninterest-Bearing Deposits 130,913 Other Noninterest-Bearing Liabilities 51,299 ------------ Total Liabilities 4,555,195 Stockholders' Equity 670,560 ------------ Total Liabilities and Stockholders' Equity $ 5,225,755 ============ Net Interest-Earning Assets $ 304,936 ============ Net Interest Income/Interest Rate Spread $ 152,927 3.11% ========================== Net Interest Margin 3.27% ============= Twelve Months Ended ---------------------------------------- Dec. 31, 2004 --------------------------------------- Average Interest Average Balance Yield/Cost --------------------------------------- Interest-Earning Assets: Total Loans(1) $ 2,706,840 $ 146,685 5.42% Securities(2) 537,505 23,058 4.29 FHLB Stock 70,565 2,811 3.98 Cash and Cash Equivalents(3) 5,703 82 1.44 ------------------------- Total Interest-Earning Assets 3,320,613 172,636 5.20 Noninterest-Earning Assets 300,211 ----------- Total Assets $ 3,620,824 ============ Interest-Bearing Liabilities: Deposits: Transaction Accounts(4) $ 818,594 13,864 1.69 Certificates of Deposits 757,734 12,273 1.62 ------------------------- Total Deposits 1,576,328 26,137 1.66 FHLB Advances 1,398,274 27,731 1.98 Exchange Balances - - - Junior Subordinated Debentures 102,372 5,005 4.89 Other Borrowings (5) 49,467 741 1.50 ------------------------- Total Interest-Bearing Liabilities 3,126,441 59,614 1.91 ------------ Noninterest-Bearing Deposits 71,884 Other Noninterest-Bearing Liabilities 27,678 ------------ Total Liabilities 3,226,003 Stockholders' Equity 394,821 ------------ Total Liabilities and Stockholders' Equity $ 3,620,824 ============ Net Interest-Earning Assets $ 194,172 ============ Net Interest Income/Interest Rate Spread $ 113,022 3.29% ========================== Net Interest Margin 3.40% ============= (1) The average balance of loans receivable includes loans held 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. (5) Consists of securities sold under agreements to repurchase, federal funds purchased, warehouse line of credit and other short- term borrowings. COMMERCIAL CAPITAL BANCORP, INC. UNAUDITED PERFORMANCE RATIOS AND OTHER DATA (Dollars in Thousands, except share data) Twelve Months Ended ---------------------------- Dec. 31, 2005 Dec. 31, 2004 ---------------------------------------------------------------------- Operational Ratios Earnings per Share - Basic $ 1.35 $ 1.29 Earnings per Share - Diluted 1.29 1.21 Return on Average Assets 1.42% 1.55% Return on Average Tangible Assets 1.54 1.65 Return on Average Stockholders' Equity 11.09 14.25 Return on Average Tangible Stockholders' Equity 26.61 31.14 Common Shares Outstanding at End of Period 56,487,280 54,519,579 Weighted Average Shares Outstanding -- Basic 55,209,991 43,749,774 Weighted Average Shares Outstanding -- Diluted 57,491,258 46,351,889 Shares Repurchased During the Period 1,036,400 831,700 Efficiency Ratio 38.58 28.09 G&A to Average Assets 1.31 0.99 Effective Tax Rate 36.02 37.80 Core Loan Fundings $ 2,449,284 $ 1,689,702 Total Loan Fundings 2,558,472 1,850,029 Multifamily Fundings as a % of Total Fundings 50% 62% Adjustable Rate Core Loan Fundings $ 2,375,940 $ 1,670,805 12MAT Core Loan Fundings 1,339,048 1,084,701 Fixed Rate Core Loan Fundings 73,344 18,897 Loans Sold 748,288 182,109 Net Charge-Offs (Recoveries) 21 $ (8) COMMERCIAL CAPITAL BANCORP, INC. UNAUDITED PERFORMANCE RATIOS AND OTHER DATA (Dollars in Thousands, except share data) Three Months Ended ------------------------------------------ Dec. 31, 2005 Sept. 30, 2005 June 30, 2005 ---------------------------------------------------------------------- Operational Ratios Earnings per Share - Basic $ 0.27 $ 0.30 $ 0.35 Earnings per Share - Diluted 0.26 0.29 0.34 Return on Average Assets 1.15% 1.30% 1.47% Return on Average Tangible Assets 1.24 1.41 1.59 Return on Average Stockholders' Equity 8.69 9.89 11.62 Return on Average Tangible Stockholders' Equity 20.59 23.93 28.11 Common Shares Outstanding at End of Period 56,487,280 55,640,363 55,388,061 Weighted Average Shares Outstanding -- Basic 55,578,219 55,244,376 55,186,788 Weighted Average Shares Outstanding -- Diluted 57,590,506 57,565,159 57,522,870 Shares Repurchased During the Period - 72,000 260,000 Efficiency Ratio 47.23% 43.47% 33.32% G&A to Average Assets 1.56 1.53 1.16 Effective Tax Rate 33.69 34.42 36.42 Core Loan Fundings $ 684,656 $ 570,196 $ 599,303 Total Loan Fundings 716,039 609,894 624,715 Multifamily Fundings as a % of Total Fundings 47% 49% 51% Adjustable Rate Core Loan Fundings $ 647,593 $ 557,175 $ 578,354 12MAT Core Loan Fundings 372,322 349,711 304,268 Fixed Rate Core Loan Fundings 37,063 13,021 20,949 Loans Sold 45,794 160,507 386,144 Balance Sheet Ratios & Data Tangible Assets 5,061,134 4,836,165 4,780,345 Tangible Equity 295,702 281,232 268,801 Equity to Assets at End of Period 12.78% 13.00% 12.90% Tangible Equity to Assets at End of Period 5.41 5.37 5.19 Tangible Equity to Tangible Assets at End of Period 5.84 5.82 5.62 Nonperforming Assets $ 8,581 $ 8,935 $ 12,098 Nonperforming Assets to Total Assets 0.16% 0.17% 0.23% Allowance for Loan Losses to Loans Held for Investment at End of Period 0.66 0.73 0.76 Allowance for Loan Losses to Nonaccrual Loans 335 321 237 Net Charge-Offs (Recoveries) $ 18 $ 8 $ 12 Per Share Data Book value Per Share 12.36 12.23 12.07 Tangible Book Value per Share 5.23 5.05 4.85 Three Months Ended --------------------------------------------------------- Mar. 31, 2005 Dec. 31, 2004 --------------------------------------------------------- Operational Ratios Earnings per Share - Basic $ 0.42 $ 0.37 Earnings per Share - Diluted 0.40 0.36 Return on Average Assets 1.78% 1.61% Return on Average Tangible Assets 1.92 1.73 Return on Average Stockholders' Equity 14.41 13.06 Return on Average Tangible Stockholders' Equity 34.49 31.55 Common Shares Outstanding at End of Period 55,416,348 54,519,579 Weighted Average Shares Outstanding -- Basic 54,821,891 54,399,694 Weighted Average Shares Outstanding -- Diluted 57,277,806 56,947,525 Shares Repurchased During the Period 704,400 174,300 Efficiency Ratio 30.07% 28.13% G&A to Average Assets 0.98 1.01 Effective Tax Rate 38.23 37.26 Core Loan Fundings $ 595,129 $ 495,730 Total Loan Fundings 607,824 540,783 Multifamily Fundings as a % of Total Fundings 56% 59% Adjustable Rate Core Loan Fundings $ 592,818 $ 487,234 12MAT Core Loan Fundings 312,747 281,089 Fixed Rate Core Loan Fundings 2,311 8,496 Loans Sold 155,843 166,257 Balance Sheet Ratios & Data Tangible Assets 4,949,880 4,660,655 Tangible Equity 269,313 261,947 Equity to Assets at End of Period 12.24% 12.44% Tangible Equity to Assets at End of Period 5.05 5.21 Tangible Equity to Tangible Assets at End of Period 5.44 5.62 Nonperforming Assets $ 6,475 $ 6,601 Nonperforming Assets to Total Assets 0.12% 0.13% Allowance for Loan Losses to Loans Held for Investment at End of Period 0.80 0.93 Allowance for Loan Losses to Nonaccrual Loans 444 558 Net Charge-Offs (Recoveries) $ (17) $ 11 Per Share Data Book value Per Share 11.78 11.47 Tangible Book Value per Share 4.86 4.80 COMMERCIAL CAPITAL BANCORP, INC. Loans Funded by Product Type (Dollars in Thousands) Three Months Ended ------------------------------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 2005 2005 2005 2005 2004 ------------------------------------------------- Real Estate Originations Multifamily $253,989 $297,477 $290,604 $338,313 $320,383 Commercial Real Estate 80,664 54,277 38,371 45,435 18,706 ------------------------------------------------- Total Income Property 334,653 351,754 328,975 383,748 339,089 Single Family Residential 81,884 96,644 122,669 146,539 110,065 Construction & Land 150,669 103,347 43,270 47,908 44,226 ------------------------------------------------- Total Real Estate Loan Originations 567,206 551,745 494,914 578,195 493,380 ------------------------------------------------- Real Estate Loans Purchased Multifamily 80,201 1,136 28,965 - - Commercial Real Estate 23,592 - 71,124 - - ------------------------------------------------- Total Income Property 103,793 1,136 100,089 - - Construction & Land 10,482 8,815 - 10,685 - ------------------------------------------------- Total Real Estate Loans Purchased 114,275 9,951 100,089 10,685 - ------------------------------------------------- Total Real Estate Fundings 681,481 561,696 595,003 588,880 493,380 ------------------------------------------------- Bank Business and Other Originations 3,175 8,500 4,300 6,249 2,350 ------------------------------------------------- Total Core Loan Fundings 684,656 570,196 599,303 595,129 495,730 Broker/Conduit Originations 31,383 39,698 25,412 12,695 45,053 ------------------------------------------------- Total Loan Fundings $716,039 $609,894 $624,715 $607,824 $540,783 ================================================= COMMERCIAL CAPITAL BANCORP, INC. LOAN FUNDINGS by INTEREST TYPE Three Months Ended December 2005 (Dollars in Thousands) Fixed 12mat CMT LIBOR ------------------------------------------- Real Estate Originations Multifamily $10,285 $198,548 $- $13,758 Commercial Real Estate 11,741 21,898 43,210 3,815 ------------------------------------------- Total Income Property 22,026 220,446 43,210 17,573 Single Family Residential 430 75,927 4,479 - Construction & Land 7,000 1,740 - 3,500 ------------------------------------------- Total Real Estate Loan Originations 29,456 298,113 47,689 21,073 Real Estate Loans Purchased Multifamily - 74,209 - 3,823 Commercial Real Estate - - - - ------------------------------------------- Total Income Property - 74,209 - 3,823 Construction & Land 7,607 - - - ------------------------------------------- Total Real Estate Loans Purchased 7,607 74,209 - 3,823 ------------------------------------------- Total Real Estate Fundings 37,063 372,322 47,689 24,896 Bank Business and Other Originations - - - - ------------------------------------------- Total Core Loan Fundings $37,063 $372,322 $47,689 $24,896 Broker/Conduit Originations Total Loan Fundings COFI Prime Other Total ------------------------------------------- Real Estate Originations Multifamily $ 30,398 $ 1,000 $ - $ 253,989 Commercial Real Estate - - - 80,664 ------------------------------------------- Total Income Property 30,398 1,000 - 334,653 Single Family Residential - 1,048 - 81,884 Construction & Land - 138,429 - 150,669 ------------------------------------------- Total Real Estate Loan Originations 30,398 140,477 - 567,206 Real Estate Loans Purchased - Multifamily - 2,169 - 80,201 Commercial Real Estate - 23,592 - 23,592 ------------------------------------------- Total Income Property - 25,761 - 103,793 Construction & Land - 2,875 - 10,482 ------------------------------------------- Total Real Estate Loans Purchased - 28,636 - 114,275 ------------------------------------------- Total Real Estate Fundings 30,398 169,113 - 681,481 Bank Business and Other Originations - - 3,175 3,175 ------------------------------------------- Total Core Loan Fundings $ 30,398 $ 169,113 $ 3,175 $ 684,656 Broker/Conduit Originations 31,383 ---------- Total Loan Fundings $ 716,039 ========== COMMERCIAL CAPITAL BANCORP, INC. Reconciliation of Non-GAAP Financial Measures (Dollars in Thousands, except per share data) The following tables provide 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: Q4 2005 As Reported Excluding Premium/Discount Effect -------------------------------- -------------------- Average Interest Avg. Average Interest Balance Yield/Cost Balance -------------------------------- -------------------- Total Interest- Earning Assets $4,663,765 $69,088 5.93% $ 3,001 $ (572) Total Interest- Bearing Liabilities 4,374,130 31,685 2.87% (2,875) 309 -------- --------- Net Interest Income/Interest Rate Spread $37,403 3.06% $ (881) Net Interest Margin 3.21% Q4 2005 Adjusted -------------------------------- Average Interest Avg. Balance Yield/Cost -------------------------------- Total Interest- Earning Assets $4,666,766 $68,516 5.87% Total Interest- Bearing Liabilities $4,371,255 31,994 2.90% -------- Net Interest Income/Interest Rate Spread $36,522 2.97% Net Interest Margin 3.13% Q4 2004 As Reported Excluding Premium/Discount Effect -------------------------------- -------------------- Average Interest Avg. Average Interest Balance Yield/Cost Balance -------------------------------- -------------------- Total Interest- Earning Assets $4,554,868 $60,393 5.30% $ 11,643 $ (2,400) Total Interest- Bearing Liabilities 4,267,578 21,925 2.04% (4,893) 962 -------- --------- Net Interest Income/Interest Rate Spread $38,468 3.26% $ (3,362) Net Interest Margin 3.38% Q4 2004 Adjusted -------------------------------- Average Interest Avg. Balance Yield/Cost -------------------------------- Total Interest- Earning Assets 4,566,511 $57,993 5.08% Total Interest- Bearing Liabilities 4,262,685 22,887 2.14% -------- Net Interest Income/Interest Rate Spread $35,106 2.94% Net Interest Margin 3.08% The following tables provide a reconciliation of the Company's net income and total general and administrative expenses excluding the effect of the expenses related to the Commercial Banking Division. Management believes that the performance of the Commercial Banking Division and its impact on the Company's overall financial condition and results of operations will be more evident when the Division is able to operate without limitations imposed by the litigation process. Accordingly, management believes that the exclusion of direct organization, start-up and litigation costs related to the Division will provide a more meaningful presentation of the Company's fourth quarter results of operations. Three Months Ended Net Income Dec. 31, 2005 ---------------- Net Income - as Reported $15,101 Adjustments Related to the Commercial Banking Division: Add: Reversal of Compensation Expenses 1,015 Add: Reversal of Professional Expenses 1,188 Add: Reversal of Other Operating Expenses 71 Less: Tax Effect (42%) (955) ---------------- Net Income - Non-GAAP $16,420 ================ Three Months Ended Total General and Administrative Expense Dec. 31, 2005 ---------------- Total General and Administrative Expense - as Reported $20,532 Adjustments Related to the Commercial Banking Division: Less: Compensation Expenses (1,015) Less: Professional Expenses (1,188) Less: Other operating Expenses (71) ---------------- Total General and Administrative Expense - Non-GAAP $18,258 ================ Selected Financial Highlights: Three Months Three Months Ended Ended Dec. 31, 2005 Dec. 31, 2005 ---------------- ---------------- Non-GAAP GAAP ---------------- ---------------- Basic EPS $0.30 $0.27 Diluted EPS 0.29 0.26 Return on Average Assets(1) 1.25% 1.15% Return on Tangible Assets(1) 1.35 1.24 Return on Average Equity(1) 9.45 8.69 Return on Average Tangible Equity(1) 22.39 20.59 Efficiency Ratio 42.00 47.23 G&A to Average Assets(1) 1.39 1.56 (1) Average asset and equity balances were not adjusted for purposes of calculating these Non-GAAP financial ratios COMMERCIAL CAPITAL BANK, FSB Selected Financial Data (Dollars in Thousands) Dec. 31, 2005 Dec. 31, 2004 ---------------------------------------------------------------------- ASSETS Cash and Cash Equivalents $ 32,843 $ 16,609 Securities Available for Sale 382,642 489,371 FHLB Stock 84,788 96,046 Loans Held For Investment Single Family 394,678 841,818 Multifamily 3,050,139 2,396,788 Commercial Real Estate 601,665 420,015 Construction 202,237 225,058 Land 74,948 56,308 ----------------------------- Total Real Estate Loans 4,323,667 3,939,987 Business & Other Loans 12,283 16,360 ----------------------------- Total Loans Held for Investment 4,335,950 3,956,347 Net Deferred Fees, Premiums and Discounts 4,779 (3,326) Allowance for Loan Losses (28,705) (36,835) ----------------------------- Total Loans Held for Investment, Net 4,312,024 3,916,186 Loans Held For Sale 22,999 - ----------------------------- Total Loans 4,335,023 3,916,186 Other Assets 562,060 489,183 ---------------------------------------------------------------------- TOTAL ASSETS $ 5,397,356 $ 5,007,395 ====================================================================== LIABILITIES AND STOCKHOLDER'S EQUITY Deposits Demand Deposits - Noninterest- Bearing $ 178,139 $ 101,119 Demand Deposits - Interest-Bearing 71,386 78,003 Money Market Checking 749,689 478,505 Money Market Savings 553,561 245,306 Savings 147,401 336,474 ----------------------------- Total Transaction Deposits 1,700,176 1,239,407 Total Time Deposits 1,179,346 1,025,723 ----------------------------- Total Deposits 2,879,522 2,265,130 Borrowings 1,669,806 1,957,349 Other Liabilities 54,239 55,530 ---------------------------------------------------------------------- TOTAL LIABILITIES 4,603,567 4,278,009 STOCKHOLDER'S EQUITY 793,789 729,386 ---------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 5,397,356 $ 5,007,395 ====================================================================== *T