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SOUTH YARMOUTH, MA-A change in a state law on the deductibility of dividends from a REIT subsidiary resulted in CCBT Financial Companies Inc. posting a first-quarter loss of $1.5 million. In the same period in 2002, the $1.3-billion holding company of the Cape Cod Bank & Trust Co. recorded a $5-million profit.

Without the change in the law that went into effect March 5, CCBT Financial Companies would have posted a first-quarter profit of $3.6 million, company officials indicate.

“As a result of the enactment of this legislation, we have ceased recording the tax benefits associated with the dividend received deduction effective for the 2003 tax year,” says CEO and president Stephen B. Lawson in a statement. “We believe that this legislation will be challenged, especially the retroactive provisions, on constitutional and other grounds. We would support such a challenge and otherwise intend to defend vigorously our position.”

CCBT Financial Companies’ first-quarter results also were hurt by low interest rates and prepayment of mortgages.

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