SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[_X_] Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2004
or
[___] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the transition period from _____________ to ___________
Commission File Number: 0-27384
| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
Capital Corp of the West
401 (k) Plan
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
CAPITAL CORP OF THE WEST
(Exact name of registrant as specified in its charter)
550 West Main, Merced, CA 95340 (Address of principal executive offices) |
Registrant’s telephone number, including area code: (209) 725-2200
Former name, former address and former fiscal year, if changed since last report: Not applicable
CAPITAL CORP OF THE WEST
401(K) PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE WITH
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 2004 AND 2003
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of Capital Corp of the West, Inc. on Form S-8 of our report dated July 27, 2005, with respect to the financial statements and schedules of the Capital Corp of the West, Inc. Stock Bonus Employee Stock Ownership Plan and 401(k) Plan included in the annual report for the plan for the plan years ended December 31, 2004 and 2003, as filed on Form 11-K with Securities and Exchange Commission. We also consent to the use of our name on our report, dated July 27, 2005, with respect to the financial statements and schedules of the Capital Corp of the West, Inc. Stock Bonus Employee Stock Ownership Plan and 401(k) Plan for the years ended December 31, 2004 and 2003, included in the Annual Report on Form 11-K which is filed electronically with the Securities and Exchange Commission.
Cassabon & Associates, LLP
Certified Public Accountants
Capital Corp of the West
401(k) Plan
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying statements of net assets available for benefits of Capital Corp of the West 401(k) Plan (the “Plan”) as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the year ended December 31, 2004. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in its net assets available for benefits for the year ended December 31, 2004, in conformity with generally accepted accounting principles in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information included in Schedule H - Financial Information (IRS Form 5500) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ CASSABON & ASSOCIATES, LLP
Fresno, California
July 27, 2005
401 (K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
| | | 2004 | | 2003 | |
| ASSETS | | | | | |
| | | | | | |
| Investments, at fair value: | | | | | |
| | | | | | |
| Shares of registered investment companies: | | | | | | | |
| Great West Life funds | | $ | - | | $ | 2,507,087 | |
| First Trust Corporation funds | | | 3,139,328 | | | - | |
| Capital Corp of the West stock | | | - | | | 5,326,509 | |
| Unitized trust fund | | | 6,746,567 | | | - | |
| Participant notes received | | | 136,437 | | | 104,974 | |
| | | | | | | | |
| Total investments | | | 10,022,332 | | | 7,938,570 | |
| | | | | | | | |
| Receivables: | | | | | | | |
| | | | | | | | |
| Employer’s contribution | | | 46,502 | | | - | |
| Other receivables | | | 880 | | | 40,074 | |
| | | | | | | | |
| Total receivables | | | 47,382 | | | 40,074 | |
| | | | | | | | |
| Cash and cash equivalents | | | 161,587 | | | 15,098 | |
| | | | | | | | |
| NET ASSETS AVAILABLE FOR BENEFITS | | $ | 10,231,301 | | $ | 7,993,742 | |
The accompanying notes are an integral component of these financial statements
401 (K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2004
| ADDITIONS TO NET ASSETS | | | |
| | | | |
| Investment income: | | | |
| | | | |
| Net realized gain and unrealized appreciation in fair value of investments | | $ | 1,332,866 | |
| Dividends and interest | | | 24,261 | |
| | | | | |
| Net investment income | | | 1,357,127 | |
| | | | | |
| Contributions: | | | | |
| | | | | |
| Participants | | | 1,062,767 | |
| Rollovers | | | 34,455 | |
| Employer | | | 219,947 | |
| | | | | |
| Net contribution income | | | 1,317,169 | |
| | | | | |
| Total additions | | | 2,674,296 | |
| | | | | |
| DEDUCTIONS FROM NET ASSETS | | | | |
| | | | | |
| Benefits paid to participants | | | 387,874 | |
| Administrative expenses | | | 48,863 | |
| | | | | |
| Total deductions | | | 436,737 | |
| | | | | |
| NET INCREASE | | | 2,237,559 | |
| | | | | |
| NET ASSETS AVAILABLE FOR BENEFITS | | | | |
| | | | | |
| December 31, 2003 | | | 7,993,742 | |
| December 31, 2004 | | $ | 10,231,301 | |
The accompanying notes are an integral component of these financial statements
401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of the Plan:
The following description of Capital Corp of the West 401(k) Plan (Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions.
General:
The Plan is a defined contribution plan. Every Employee of Capital Corp of the West (the Company) is eligible to participate on the first day of the plan year quarter coinciding with or next following the date on which he has completed three months of service for participation and has reached age 21. For the period from January 1, 2004 through July 8, 2004, Great-West Retirement Services and Hoefer & Arnett were the trustees of the Plan and Capital Corp of the West served as custodian and record keeper. Beginning July 9, 2004, First Trust Corporation became the trustee of the Plan and Capital Corp of the West continues to serve as custodian and record keeper. The Plan was established January 1, 1992. The Plan is subject to the provisions of the Employee Retirement Security Act of 1974 (ERISA) and is administered by a plan administrator appointed by the Company.
Contributions:
Participants may contribute any percentage that allows the participant to reach the section 401(k) pre-tax contribution limit for 2004 of $13,000 for participants under age 50. Participants who are age 50 and older can contribute an additional $3,000 for a total of $16,000. These salary reduction contributions are fully vested at all times. Participants direct the investment of their contributions into various investment options offered by the Plan. As of December 31, 2004, the Plan offers twenty equity funds and Capital Corp of the West Common Stock Unitized Trust Fund. The Company may make a matching contribution. The amount of the match, if any, will be determined by the Company each year. Additional discretionary amounts may be contributed at the option of the company's board of directors. The Company made discretionary contributions of $219,947 and $186,345 for the years ended December 31, 2004 and 2003, respectively.
Participant Accounts:
Participant accounts are maintained at fair market value. Each participant's account is credited with the participant's contribution and allocation of (a) the Company's contribution and, (b) Plan earnings, and (c) forfeitures of terminated participant's non-vested accounts. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account.
CAPITAL CORP OF THE WEST
401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
Vesting:
Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vesting in Company's matching and discretionary contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after three years of credited service.
Participant Notes Receivable:
Participants may borrow from their fund accounts up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Loan transactions are treated as a transfer to (from) the Investment Fund from (to) the Participants Note Fund. Loan terms range from 1-5 years, unless the loan is used for the purchase of a primary residence of the Participant, in which case the term of such loan shall be arrived at by mutual agreement between the Committee and the Participant. All loans shall be secured by the borrower's vested account balance and shall be evidenced by the borrower's promissory note. The loans will bear interest at a rate being charged for similar purpose loans by institutional lenders. All loans have a definite repayment schedule with payments being no less than quarterly.
Payment of Benefits:
On termination of service due to death, disability or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested interest in his or her account, annual installments over a period of 10 years or less or an amount each year not to extend beyond the participant's life expectancy.
Administrative Expenses:
Administrative expenses are paid directly by the Plan.
Termination of Plan:
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become fully vested in their accounts, and would be entitled to receive the entire amount of their account.
CAPITAL CORP OF THE WEST
401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
Note 2 - Summary of Accounting Policies:
Basis of Financial Statements:
The accompanying financial statements of the Plan are prepared using the accrual method of accounting.
Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.
Investment Income:
Interest income from investments is recorded as earned on an accrual basis. Dividend income is recorded on the ex-dividend date.
Investments:
Investments in the Capital Corp of the West Stock Unitized Trust Fund are valued based on the current market value of the underlying assets of the fund. These investments include cash equivalents as well as shares of the common stock of Capital Corp of the West which, along with investments in registered investment companies, are valued at their last reported sales price on the last business day of the Plan year. Participant notes receivable are stated at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
In accordance with the policy of stating investments at fair value, changes in unrealized appreciation or depreciation are reflected in the statements of changes in net assets available for plan benefits.
Contributions:
Participant contributions are recorded on a bi-weekly basis as they are withheld from the participant’s wages.
Distributions to Participants:
Distributions to participants are recorded when paid by the Plan.
Expenses:
Administrative expenses are recorded as paid for by the Plan.
CAPITAL CORP OF THE WEST
401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
Note 3 - Investment Programs:
The funds listed below were the investment options for salary reduction contributions and employer matching contributions as of December 31, 2004. Any of these funds may be invested in short-term debt obligations of any nature or held in cash pending investment or distribution. The assets that comprise these funds may be invested in registered investment companies or the common stock of the Company.
First Trust Corporation Funds: | |
| | |
| Ariel Fund SBI | JP Morgan Mid Cap Value Class A |
| Dodge & Cox Income Fund | Julius Baer International Equity A |
| Fidelity Mid Cap Stock Fund | Loomis Sayles Bond Fund Retail Class |
| Fidelity Short Term Bond Fund Retail Cla | Oakmark International Fd |
| Frank Russell Lifepoint Eqty Agg Strategy | Oppenheimer Capital Appreciation Fund Cl |
| Frank Russell Lifepoints Agg Strategy Cl | Royce Fund Premier Ser |
| Frank Russell Lifepoints Balanced Strategy | T Rowe Price Equity Income |
| Frank Russell Lifepoints Conserv Strategy | TCW Galileo Value Opportunities Class I |
| Frank Russell Lifepoints Moderate Strategy | Vanguard Explorer Fund |
| Growth Fund of America Class R-4 | Vanguard Index Trust - 500 Portfolio |
| Portfolio Accounting Svc CCOW Unitized Stock | |
Participants may change their investment options.
The following presents the investment that represents 5% or more of the Plan’s assets as of December 31:
| | 2004 |
COMMON STOCK UNITIZED TRUST FUND | |
(valued at fair value of underlying assets) | |
| | |
| Capital Corp of the West Stock Fund | 6,746,567 |
During 2004, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $1,332,866, as follows:
| | | 2004 | |
| | | | |
| Registered investment companies | | $ | 268,408 | |
| Common Stock | | | 1,064,458 | |
| | | | | |
| | | $ | 1,332,866 | |
CAPITAL CORP OF THE WEST
401 (K) PLAN NOTES
TO FINANCIAL STATEMENTS
Note 4 - Information Prepared By and Certified By Trustee
The following information included in the accompanying financial statements and supplemental schedules was obtained from data that has been prepared and certified to as complete and accurate by First Trust Corporation (trustee) as of December 31, 2004.
| | | 2004 | |
Investments, at fair value: | | | |
| Registered investment companies | | $ | 3,139,328 | |
| Capital Corp of the West unitized stock fund | | $ | 6,746,567 | |
Investment income: | | | | |
| Net appreciation (depreciation) in fair value of investments | | $ | 1,332,866 | |
| Interest income | | $ | 781 | |
Note 5 - Tax Status
The Plan obtained its latest determination letter on October 25, 1995, in which the Internal Revenue Service stated that the plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The plan has been amended since receiving the determination letter. However, the plan administrator and the plan’s tax counsel believe that the plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and the related trust was tax-exempt as of the financial statement date.
Note 6 - Party-In-Interest Transactions
Plan investments are funds managed by First Trust Corporation. First Trust Corporation is the trustee of the Plan and therefore, these transactions qualify as a party in interest.
The Capital Corp of the West Stock Unitized Trust Fund holds 139,195 shares of Capital Corp of the West common stock as of December 31, 2004 and therefore, qualifies as a party-in-interest.
Participants have loans from their fund accounts outstanding in the amount of $136,437 as of December 31, 2004.
CAPITAL CORP OF THE WEST
401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
Note 7 - Subsequent Event
On February 10, 2005, the Plan received a favorable determination letter from the Internal Revenue Service, which stated that the Plan amendments executed on October 25, 1998, July 31, 2000, June 25, 2002 and September 2, 2003 are in accordance with the applicable sections of the Internal Revenue Code (IRC).
CAPITAL CORP OF THE WEST
401 (K) PLAN
(EIN 77-0405791; PN 003
SUPPLEMENTAL SCHEDULE ACCOMPANYING THE FORM 5500
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2004
SUPPLEMENTARY INFORMATION
| | | (b) Identity of Issue, Borrower,Lessor, or Similar Party | | | (d) | | | (e) |
| (a) | | (c) Description of Investment, including maturity date, rate of interest, collateral, par or maturity value Cost Value | | | Cost | | | Current Value |
| | | | | | | | | |
| | | First Trust Corporation: | | | | | | |
| | | Ariel Fund SBI, 3,357 shares | | $ | 159,990 | | $ | 178,493 |
| | | Dodge & Cox Income Fund, 8,961 shares | | | 111,578 | | | 115,066 |
| | | Fidelity Mid Cap Stock Fund, 4,532 shares | | | 95,012 | | | 106,286 |
| | | Fidelity Short Term Bond Fund Retail Class, 11,784 shares | | | 104,458 | | | 105,819 |
| | | Frank Russell Lifepoint Eqty Agg Strategy Cl 5, 1,667 shares | | | 15,691 | | | 16,971 |
| | | Frank Russell Lifepoints Agg Strategy Cl S, 9,092 shares | | | 86,811 | | | 96,918 |
| | | Frank Russell Lifepoints Balanced Strategy Cl 5, 3,200 shares | | | 32,367 | | | 34,751 |
| | | Frank Russell Lifepoints Conserv Strategy Cl 5, 4,528 shares | | | 47,078 | | | 48,817 |
| | | Frank Russell Lifepoints Moderate Strategy Cl 5, 23,365 shares | | | 236,884 | | | 252,338 |
| | | Growth Fund of America Class R-4, 11,686 shares | | | 290,244 | | | 318,211 |
| | | JP Morgan Mid Cap Value Class A, 5,991 shares | | | 118,443 | | | 132,092 |
| | | Julius Baer International Equity A, 4,183 shares | | | 110,980 | | | 132,216 |
| | | Loomis Sayles Bond Fund Retail Class, 16,361 shares | | | 205,635 | | | 225,780 |
| | | Oakmark International Fd, 3,119 shares | | | 57,761 | | | 65,900 |
| | | Oppenheimer Capital Appreciation Fund Class N, 9,686 shares | | | 369,866 | | | 395,002 |
| | | Royce Fund Premier Ser, 12,268 shares | | | 166,687 | | | 185,489 |
| | | T Rowe Price Equity Income, 10,492 shares | | | 250,570 | | | 278,970 |
| | | TCW Galileo Value Opportunities Class I, 1,473 shares | | | 29,652 | | | 32,895 |
| | | Vanguard Explorer Fund, 607 shares | | | 39,620 | | | 45,230 |
| | | Vanguard Index Trust - 500 Portfolio, 3,333 shares | | | 340,606 | | | 372,084 |
| | | Portfolio Accounting Svc CCOW Unitized Stk, 513,047 shares | | | 5,174,335 | | | 6,746,567 |
| | | First Trust Institutional Money Market | | | 161,519 | | | 161,519 |
| | | First Trust Money Market Account | | | 68 | | | 68 |
| * | | Loans to participants - 16 loans with interest rates of 6.25% to 10.50% | | | - | | | 136,437 |
| | | Total assets held for investment purposes at end of year | | $ | 8,205,855 | | $ | 10,183,919 |
| | | * An asterisk in column (a) denotes a transaction with a party-in-interest | | | |
See Independent Auditors' Report
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee of the Capital Corp of the West 401(k) Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
Capital Corp of the West
401(k) and Employee Stock Ownership Plan
| Date: July 27, 2005 | By /s/ R. Dale McKinney |
| | R. Dale McKinney |
| | Chief Financial Officer |
