SALINAS, CA -- 04/21/2005 -- Central Coast Bancorp (NASDAQ: CCBN), the holding company for Community Bank of Central California, today announced a 22.7% increase in diluted earnings per share for the first quarter of 2005 as per share earnings were $0.27 versus $0.22 in the prior year period. The Company also achieved record quarterly net income of $3,845,000 for an increase of 20.5% over the $3,192,000 reported in the first quarter of 2004. As compared to the fourth quarter of 2004, net income increased 24.6% over the $3,086,000 reported in that quarter and diluted earnings per share increased 17.4% over the $0.23 reported. All earnings per share and applicable share data for the 2004 periods have been adjusted for the five-for-four stock split distributed on February 28, 2005.
The annualized return on average equity and a return on average assets were 15.0% and 1.34%, as compared to 14.0% and 1.27% for the same period in 2004.
The Company ended the first quarter with total assets of $1,168,457,000, for an increase of $4,036,000 (0.3%) from the 2004 year-end balance of $1,164,661 and an increase of $147,235,000 (14.4%) from the $1,021,222,000 balance at March 31, 2004. At the end of the first quarter of 2005, total loans were $927,739,000, a slight decrease of $3,777,000 (0.4%) from year-end, but an increase of $153,214,000 (19.8%) on a year-over-year basis. Deposits at quarter-end totaled $1,051,166,000, which was essentially flat from the 2004 year-end balance. On a year-over-year basis, deposits increased $133,580,000 (14.6%).
"Our year-over-year growth in the major balance sheet items of assets, loans and deposits has been achieved internally and is reflective of the continuing strength of our community based banking franchise," stated Nick Ventimiglia, Chairman and CEO. He continued, "We are pleased with the record quarterly earnings and the 22.7% increase in per share earnings in this first quarter of 2005. The continuing actions to raise interest rates taken by the Federal Reserve Board through its Federal Open Market Committee (FOMC) have had a favorable impact on the Company's net interest margin. The Company's balance sheet is positioned such that further rate increases should continue to have a favorable impact on earnings going forward."
Financial Summary:
Interest income, net interest income, net interest margin and the efficiency ratio are discussed below on a fully taxable equivalent basis. These items have been adjusted to give effect to $297,000 and $272,000 in taxable equivalent interest income on tax-free investments in the three-month periods ending March 31, 2005 and 2004.
Net interest income for the first quarter of 2005 was $13,292,000, an increase of $2,956,000 (28.6%) from the first quarter of 2004. Interest income for the first quarter of 2005 was $16,865,000, an increase of $3,813,000 (29.2%) from the first quarter of 2004. Increases in both the average earning assets and the yields earned on the assets contributed to the substantial improvement in interest income. In the first quarter of 2005, average earning assets were $159,322,000 (17.0%) over the prior year period. This increase in volume of earning assets added $2,441,000 to interest income. The average yield increased 63 basis points to 6.22%, which added $1,372,000 to interest income. The yield on earning assets reflected an increase of 19 basis points from the 6.03% earned in the fourth quarter of 2004.
Interest expense in the first quarter of 2005 totaled $3,573,000, which was an increase of $857,000 (31.6%) over the first quarter of 2004. Rates paid on interest bearing liabilities have begun to move up on a year-over-year basis. The average rate paid on interest bearing liabilities in the first quarter of 2005 increased 24 basis points to 1.88% as compared to 1.64% in the year earlier period and increased 21 basis points from 1.67% in the fourth quarter of 2004. The higher rates increased interest expense by $353,000 from the year earlier period. Average balances of interest bearing liabilities in the first quarter of 2005 increased by $106,605,000 (16.1%) over the prior year period, which added $504,000 to interest expense.
The net interest margin for the first quarter of 2005 was 4.90% as compared to 4.87% for the fourth quarter of 2004 and 4.42% in the first quarter of 2004. If the FOMC continues to raise the interest rates, we would expect the net interest margin to improve slightly during the second quarter.
The Company provided $1,150,000 for loan losses in the first quarter of 2005 as compared to $65,000 in the first quarter of 2004. At March 31, 2005, nonperforming and restructured loans totaled $1,041,000 as compared to $835,000 at December 31, 2004 and $10,520,000 at March 31, 2004. The ratio of the allowance for loan losses to total loans was 1.86% at March 31, 2005, 1.75% at December 31, 2004 and 2.15% at March 31, 2004.
Noninterest income increased $136,000 (14.8%) in the first quarter of 2005 as compared to the first quarter of 2004. Much of the change was due to realizing a $12,000 gain on the sale of securities in 2005 as compared to a loss of $104,000 in 2004.
Noninterest expenses increased $667,000 (11.1%) to a total of $6,703,000 in the first quarter of 2005 as compared to the first quarter 2004. Noninterest expenses increased primarily due to increased business activity and the two branches added in 2004. The efficiency ratio for the period ended March 31, 2005 reflected a significant decrease to 46.7% from the 53.6% realized in the first quarter of 2004. The improvement in the efficiency ratio is the result of income growing at a faster rate than did the noninterest expenses.
During the first quarter of 2005, the Company repurchased 49,615 shares of its common stock at an average price of $17.60. The Company has 197,749 shares authorized for repurchase remaining under its February 2001 repurchase plan. The above shares have been adjusted for the five-for-four stock split distributed on February 28, 2005.
Central Coast Bancorp operates as a holding company for Community Bank of Central California. Community Bank, headquartered in Salinas, has fourteen branch offices located in: the Monterey County communities of Salinas (2), Monterey (2), Seaside, Marina, Castroville, Gonzales, Soledad and King City; the Santa Clara County community of Gilroy; the Santa Cruz County communities of Santa Cruz and Watsonville; and in the San Benito County community of Hollister. The Bank provides traditional deposit, lending, mortgage and commercial products and services to business and retail customers throughout the California Central Coast area.
Information on the Company and its subsidiary Bank may be obtained from the Company's website www.community-bnk.com. Copies of the Company's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments thereto are available free of charge on the website as soon as they are filed with the SEC. To access these reports through a link to the Edgar reporting system simply select the "Central Coast Bancorp -- Corporate Profile" menu item, then click on the "Central Coast Bancorp SEC Filings" link. Section 16 insider filings can also be accessed through the website. Follow the same instructions and select "Central Coast Bancorp SEC Section 16 Reports."
Forward-Looking Statements
In addition to the historical information contained herein, this press release contains certain forward-looking statements. The reader of this press release should understand that all such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Changes to such risks and uncertainties, which could impact future financial performance, include, among others, (1) competitive pressures in the banking industry; (2) changes in the interest rate environment; (3) general economic conditions, nationally, regionally and in operating market areas, including a decline in real estate values in the Company's market areas; (4) the effects of terrorism, the threat of terrorism or the impact of potential military conflicts; (5) changes in the regulatory environment; (6) changes in business conditions and inflation; (7) changes in securities markets; (8) data processing problems; (9) variances in the actual versus projected growth in assets; (10) return on assets; (11) loan losses; (12) expenses; (13) rates charged on loans and earned on securities investments; (14) rates paid on deposits; and (15) fee and other noninterest income earned, as well as other factors. This entire press release and the Company's periodic reports on Forms 10-K, 10-Q and 8-K should be read to put such forward-looking statements in context and to gain a more complete understanding of the uncertainties and risks involved in the Company's business.
CENTRAL COAST BANCORP CONSOLIDATED CONDENSED FINANCIAL DATA (Unaudited) (Dollars in thousands, except share and per share data) Three Months Ended March 2005 2004 ----------- ----------- Statement of Income Data Interest income Loans (including fees) $ 14,690 $ 11,137 Investment securities 1,765 1,578 Other 113 65 ----------- ----------- Total interest income 16,568 12,780 ----------- ----------- Interest expense Interest on deposits 3,501 2,647 Other 72 69 ----------- ----------- Total interest expense 3,573 2,716 ----------- ----------- Net interest income 12,995 10,064 Provision for loan losses 1,150 65 ----------- ----------- Net interest income after provision for loan losses 11,845 9,999 Noninterest income Service charges on deposits 716 740 Other 338 178 ----------- ----------- Total noninterest income 1,054 918 Noninterest expenses Salaries and benefits 4,124 3,564 Occupancy 768 638 Furniture and equipment 532 483 Other 1,279 1,351 ----------- ----------- Total noninterest expenses 6,703 6,036 ----------- ----------- Income before provision for income taxes 6,196 4,881 Provision for income taxes 2,351 1,689 ----------- ----------- Net income $ 3,845 $ 3,192 =========== =========== Common Share Data Earnings per share (adjusted for 5/4 stock split distributed on February 28, 2005) Basic $ 0.28 $ 0.23 Diluted $ 0.27 $ 0.22 Weighted average shares outstanding 13,946,000 13,630,000 Weighted average shares outstanding - diluted 14,486,000 14,306,000 Book value per share $ 7.43 $ 8.52 Tangible book value $ 7.43 $ 8.52 Shares outstanding 14,084,000 10,862,000 CENTRAL COAST BANCORP CONSOLIDATED CONDENSED FINANCIAL DATA (Unaudited) (Dollars in thousands) March Dec. 31 March Balance Sheet Data 2005 2004 2004 ----------- ----------- ----------- Assets Cash and due from banks $ 37,828 $ 49,068 $ 45,612 Federal funds sold 17,107 9,029 20,901 Available-for-sale securities - at fair value 179,422 169,151 180,163 Loans: Commercial 242,361 261,408 205,349 Real estate-construction 71,878 61,366 38,628 Real estate-other 601,749 594,507 519,010 Consumer 13,074 15,463 12,630 Deferred loan fees, net (1,323) (1,228) (1,092) ----------- ----------- ----------- Total loans 927,739 931,516 774,525 Allowance for loan losses (17,281) (16,270) (16,654) ----------- ----------- ----------- Net loans 910,458 915,246 757,871 Premises and equipment, net 3,711 3,944 2,730 Accrued interest receivable and other assets 19,931 18,223 13,945 ----------- ----------- ----------- Total assets $ 1,168,457 $ 1,164,661 $ 1,021,222 =========== =========== =========== Liabilities and Shareholders' Equity Deposits: Demand, noninterest bearing $ 263,933 $ 344,244 $ 239,958 Demand, interest bearing 145,623 141,190 145,267 Savings 289,740 259,319 254,579 Time 351,870 306,615 277,782 ----------- ----------- ----------- Total Deposits 1,051,166 1,051,368 917,586 Accrued interest payable and other liabilities 12,583 12,177 11,092 Shareholders' equity 104,708 101,116 92,544 ----------- ----------- ----------- Total liabilities and shareholders' equity $ 1,168,457 $ 1,164,661 $ 1,021,222 =========== =========== =========== Asset Quality Loans past due 90 days or more and accruing interest $ 348 $ - $ 236 Nonaccrual loans - 102 9,468 Restructured loans 693 733 816 ----------- ----------- ----------- Total nonperforming assets $ 1,041 $ 835 $ 10,520 =========== =========== =========== Allowance for loan losses to total loans 1.86% 1.75% 2.15% Allowance for loan losses to NPL's 1660% 1949% 158% Allowance for loan losses to NPA's 1660% 1949% 158% Regulatory Capital and Ratios Tier 1 capital 105,240 100,473 90,233 Total capital 117,782 113,104 100,782 Tier 1 capital ratio 10.5% 10.0% 10.8% Total risk-based capital ratio 11.8% 11.2% 12.0% Tier 1 leverage ratio 9.0% 9.1% 9.0% CENTRAL COAST BANCORP CONSOLIDATED CONDENSED FINANCIAL DATA (Unaudited) (Dollars in thousands) Three Months Ended March 2005 2004 ---------- ---------- Selected Financial Ratios Return on average total assets 1.34% 1.27% Return on average shareholders' equity 15.01% 14.03% Net interest margin (tax equivalent basis) 4.90% 4.42% Efficiency ratio (tax equivalent basis) 46.72% 53.63% Selected Average Balances Loans $ 906,798 $ 750,714 Taxable investments 118,219 113,163 Tax-exempt investments 55,277 49,419 Federal funds sold 18,730 26,417 ---------- ---------- Total earning assets $1,099,024 $ 939,713 ---------- ---------- Total assets $1,165,918 $1,008,129 ---------- ---------- Demand deposits - interest bearing $ 139,154 $ 131,397 Savings 288,395 252,526 Time deposits 338,798 275,738 Other borrowings 4,383 4,464 ---------- ---------- Total interest bearing liabilities $ 770,730 $ 664,125 ---------- ---------- Demand deposits - noninterest bearing $ 282,542 $ 246,703 ---------- ---------- Shareholders' equity $ 103,864 $ 91,498 ---------- ----------
Contact: Robert Stanberry Chief Financial Officer (831) 422-6642