CENTRAL COAST BANCORP
PRESS RELEASE Contact: Robert Stanberry
Chief Financial Officer
For Release 9:00 am EDT (831) 422-6642
CENTRAL COAST BANCORP ANNOUNCES A 10.3% INCREASE
IN THIRD QUARTER DILUTED EARNINGS PER SHARE
Salinas, California - October 18, 2001. Central Coast Bancorp
(Nasdaq/CCBN), the holding company for Community Bank of Central California,
today announced third quarter diluted earnings per share of $0.32, a 10.3%
increase over the $0.29 reported in the year earlier period. Net income for
the quarter ended September 30, 2001 was $2,368,000 versus $2,253,000
reported for the same period of 2000. The return on equity (ROE) and the
return on assets (ROA) for the third quarter 2001 were 14.7% and 1.25% as
compared to 15.8% and 1.36% for the same period in 2000.
Net income for the nine months ended September 30, 2001 and 2000 was
$7,450,000 and $6,571,000 with diluted earnings per share of $0.98 and
$0.83, respectively. For the first nine months of 2001, ROE was 16.1% and
ROA was 1.40% as compared to 15.9% and 1.40% for the same period in 2000.
The earnings per share for the 2000 periods have been adjusted for the 10%
stock dividend distributed in February 2001.
At September 30, 2001, the Company had assets totaling $762,814,000, another
record level. On a year over year basis, internal growth has generated an
increase in assets of $119,886,000 (18.6%); an increase in loans of
$130,551,000 (29.7%); and an increase in deposits of $92,119,000 (16.0%).
The increase in deposits was in spite of a reduction in the level of State
of California certificates of deposit from $22,000,000 at September 30, 2000
to $5,000,000 at September 30, 2001. Replacing this difference of
$17,000,000 represents additional growth in the Company's core customer base.
"The growth and performance of the Bank in this difficult interest rate
environment has been most gratifying," stated Nick Ventimiglia, Chairman,
President and CEO. He went on to say, "Our people have been very proactive
in building upon our existing customer base and seizing new opportunities.
We are proud of their accomplishments. The current economic and interest
rate climate will continue to present many challenges in the coming months.
Even in this environment, as opportunities arise, we will be looking toward
expanding our market areas."
Financial Summary:
Within the following discussion, interest income, net interest income, net
interest margin and the efficiency ratio are presented on a fully taxable
equivalent basis.
As anticipated, net interest income declined $223,000 from the third quarter
of 2000 to total $8,653,000 for the third quarter of 2001, due to the
continuing decreases in the interest rates. While the Bank has been very
successful in growing its loans, the changing rates have more than offset
the increased levels of earning assets. Interest income for the third
quarter of 2001 decreased $444,000 (3.2%) from the same quarter of 2000.
The average earning assets increased $91,987,000 (15.3%) on a quarter over
quarter basis. The increased volume of earning assets added $2,471,000 to
interest income. The average yield on earning assets for the third quarter
of 2001 was 7.65%, which was a decrease of 149 basis points from the average
yield in the third quarter of 2000. The lower yield decreased interest
income by $2,915,000. The lower yield resulted from the 350 basis points in
decreases to the prime rate in the first nine months of 2001.
Interest expense in the third quarter of 2001 also reflected the decreases
in the short term interest rates and was $221,000 (4.5%) lower than for the
same period in 2000. Average balances of interest-bearing liabilities were
higher by $56,548,000 (12.7%), which added $653,000 to interest expense.
The average rate paid on interest-bearing liabilities was 3.71% for the
quarter. This was down 68 basis points from the third quarter of 2000. The
lower rates decreased interest expense by $874,000.
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The net interest margin for the third quarter of 2001 reflects the declining
interest rate environment and was 4.96% as compared to 5.89% in the year
earlier period. As compared to the net interest margin for the second
quarter 2001, the third quarter's net interest margin was down 24 basis
points. As the Bank's loan assets reprice more quickly than do its deposit
liabilities, a declining rate environment puts downward pressure on the net
interest margin. Additional rate decreases of 75 basis points were made
during the third quarter of 2001 and another decrease of 50 basis points was
made in early October. These rate cuts and any additional cuts may put
continuing downward pressure on the net interest margin for the fourth
quarter 2001.
Noninterest income was up $255,000 (37.9%) to a total of $927,000 in the
third quarter of 2001 versus the year earlier period. Of that increase,
$165,000 was from gains on the sale of securities. Other increases were
related to increased activity.
Noninterest expenses increased $451,000 (10.5%) from the third quarter of
2000 to a total of $4,749,000 in the third quarter of 2001. The increase
was due to a new branch opened in October 2000 and generally higher business
volumes and price increases. The efficiency ratios for the third quarters
of 2001 and 2000 were 49.6% and 45.0%, respectively.
The Bank provided $760,000 for loan losses in the third quarter of 2001 as
compared to $1,530,000 in the third quarter of 2000. Net loan charge-offs
were $45,000 and $159,000 in the two quarters, respectively. At September
30, 2001, nonperforming loans totaled $1,515,000 as compared to $491,000 at
September 30, 2000. Nonperforming loans have decreased $2,487,000 from the
end of the second quarter of 2001. The ratios of the allowance for loan
losses to total loans at each third quarter end were 1.79% and 1.91%,
respectively.
During the third quarter, the Company repurchased an additional 10,500
shares of its common stock at an average price of $20.03. At quarter's end,
approximately 262,100 shares remained to be repurchased under the February
2001 plan.
Central Coast Bancorp operates as a holding company for Community Bank of
Central California. Community Bank, headquartered in Salinas, has branch
offices located in the Monterey County communities of Salinas, North
Salinas, Monterey, Seaside, Marina, Castroville, Gonzales and King City, in
the Santa Cruz County community of 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. The Bank has an
Internet web site at www.community-bnk.com.
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 various uncertainties and risks that could affect their outcome.
The Company's actual results could differ materially from those suggested by
such forward-looking statements. 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, including the
events of September 11, 2001 and thereafter; (5) changes in the regulatory
environment; (6) changes in business conditions and inflation; (7) changes
in securities markets; (8) data processing compliance problems; (9) the
California power crisis; (10) variances in the actual versus projected
growth in assets; (11) return on assets; (12) loan losses; (13) expenses;
(14) rates charged on loans and earned on securities investments; (15) rates
paid on deposits; and (16) fee and other noninterest income earned, as well
as other factors. This entire press release 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.
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CENTRAL COAST BANCORP
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share data)
Three Months Ended Nine Months Ended
September 30, September 30,
Statement of Income Data 2001 2000 2001 2000
---- ---- ---- ----
Interest income $ 13,052 $ 13,576 $ 39,417 $ 37,759
Interest expense 4,681 4,901 14,429 13,400
-------- -------- -------- --------
Net interest income 8,371 8,675 24,988 24,359
Provision for loan losses 760 1,530 955 2,856
Noninterest income 927 672 2,352 1,849
Noninterest expense 4,749 4,298 14,465 12,754
Provision for taxes 1,421 1,266 4,470 4,027
-------- -------- -------- --------
Net income $ 2,368 $ 2,253 $ 7,450 $ 6,571
======== ======== ======== ========
Share Data (adjusted for 10% stock dividend distributed on February 28, 2001)
Earnings per share
Basic $ 0.33 $ 0.30 $ 1.03 $ 0.85
Diluted $ 0.32 $ 0.29 $ 0.98 $ 0.83
Book value per common share $ 9.12 $ 7.59
Shares outstanding 7,194,000 7,500,000 7,194,000 7,500,000
Weighted average shares 7,212,000 7,576,000 7,259,000 7,671,000
Weighted average diluted shares 7,560,000 7,792,000 7,592,000 7,886,000
Balance Sheet Data
Total assets $762,814 $ 642,928
Securities, available-for-sale 144,166 140,220
Total loans, gross 570,379 439,838
Allowance for loan losses (10,224) (8,389)
Total deposits 668,220 576,101
Total shareholders' equity 65,612 56,940
Unrealized gain (loss) on securities available-for-sale, net 1,226 (3,332)
Nonperforming loans $ 1,515 $ 491
Other real estate owned 0 100
Selected Financial Ratios
Return on average total assets 1.25% 1.36% 1.40% 1.40%
Return on average equity 14.7% 15.8% 16.1% 15.9%
Net interest margin (tax equivalent basis) 4.96% 5.89% 5.27% 5.85%
Allowance for loan losses to total loans 1.79% 1.91%
Allowance for loan losses to NPL's 675% 1709%
Allowance for loan losses to NPA's 675% 1419%
Total risk based capital ratio 11.4% 13.0%
Tier 1 Capital ratio 10.2% 11.8%
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