CENTRAL COAST BANCORP
PRESS RELEASE Contact: Robert Stanberry
Chief Financial Officer
For Release 9:00am EST (831) 422-6642
rstanberry@community-bnk.com
CENTRAL COAST BANCORP ANNOUNCES RECORD EARNINGS
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FOR THE 18th CONSECUTIVE YEAR
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Salinas, California - January 24, 2002. Central Coast Bancorp (Nasdaq/CCBN),
the holding company for Community Bank of Central California, today announced
record net income for the year ended December 31, 2001. Net income for 2001
increased 6.5% to $9,509,000 versus $8,926,000 in 2000. Diluted earnings per
share for 2001 were up 10.5% to $1.26 from $1.14 in 2000 as adjusted for the
10% stock dividend distributed in February 2001. This is the 18th
consecutive year of higher year over year earnings since the Bank's first
year of operations in 1983. For 2001, the Company realized a return on
average equity of 15.1% and a return on average assets of 1.31%, as compared
to 16.0% and 1.41% for 2000.
Net income for the fourth quarters of 2001 and 2000 was $2,059,000 and
$2,354,000, respectively. Diluted earnings per share as adjusted for the 10%
stock dividend for the two periods were $0.28 and $0.31.
At December 31, 2001, the Company had total assets of $802,266,000, which was
an increase of $95,573,000 (13.5%) from year-end 2000. At December 31, 2001,
loans totaled $606,300,000, up $132,905,000 (28.1%) from the ending balances
on December 31, 2000. Deposit growth in 2001, which includes $30,000,000 of
State of California certificates of deposit, was $91,652,000 (14.5%).
Deposits totaled $724,862,000 at year-end 2001.
Nick Ventimiglia, Chairman, President and CEO, stated that, "These past two
years have presented very different economic conditions for the banking
business. In 2000, we had increasing interest rates with prime rate ending
the year at 9.50%. On January 4, 2001, the Federal Reserve Bank made the
first of eleven rate cuts during the year, which totaled 475 basis points
resulting in a prime rate of 4.75% at year-end. Through both of these
economic environments, our community based banking model has provided the
Company with continued growth in customer base, assets and earnings. We are
proud of our record of 18 consecutive years of increased earnings,
particularly in the face of the current economic and interest rate
environment." Mr. Ventimiglia also stated, "As part of our strategic growth
plan, the Bank has filed an application with the FDIC to open a branch in
Gilroy, California. We will continue to look for opportunities to expand our
banking franchise during the coming year."
Financial Summary:
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Within the following discussion, interest income, net interest income, net
interest margin and the efficiency ratio are presented on a fully taxable
equivalent basis.
Net interest income for 2001 was $34,489,000, a $562,000 (1.7%) increase over
2000. The rapidly changing interest rates in 2001 had a significant impact
on the Bank's interest income and interest expense during the year. Interest
income increased $632,000 (1.2%) to total $52,849,000 in 2001. Growth of
$92,714,000 (16.1%) in the average earning assets provided an additional
$9,343,000 to interest income. However, $8,711,000 of the interest income
increase was counteracted by the lower rates earned as the average rate
received on earning assets decreased 116 basis points.
Interest expense was $70,000 higher in 2001 over 2000, as the lower rates
paid approximately offset the increase in the volume of interest bearing
liabilities. Average balances of interest-bearing liabilities were higher by
$56,905,000, which added $2,694,000 to interest expense. Average rates paid
on interest-bearing liabilities were down 49 basis points for the year. The
lower rates reduced interest expense by $2,624,000.
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The net interest margin for 2001 reflects the declining interest rate
environment and decreased 73 basis points to 5.15% from 5.88% in 2000. The
net interest margin for the 4th quarter of 2001 was 4.81%, which was a
decrease of 112 basis points from 5.93% in the 4th quarter of 2000. Assuming
no further interest rate decreases in early 2002, management expects the net
interest margin to stabilize at its 4th quarter level. The lower margin is
expected to have a negative impact on interest earnings in 2002 as compared
to 2001.
Noninterest income was up $696,000 (28.6%) in 2001 over the year 2000. Of
the total increase, $334,000 was due to increased business activity. The
remaining $362,000 related to securities transactions. In 2001, the Bank
realized gains of $168,000 on the sale of investment securities versus a loss
of $194,000 in 2000.
Noninterest expenses increased $1,815,000 (10.4%) in 2001 over 2000. The two
new branches opened in mid to late 2000 accounted for $699,000 of the
increase on a year over year basis. After adjusting for the new branches,
the noninterest expenses were $1,116,000 (6.4%) higher in 2001. Excluding
the two new branches, salary and benefit costs were $972,000 higher due to
normal salary increases, higher benefit costs and staffing in response to
increased business activity. The efficiency ratio for 2001 was 51.1% as
compared to 47.9% in 2000.
The Bank provided $2,635,000 for loan losses in 2001 as compared to
$3,983,000 in 2000. The 2000 provision included $1,185,000 as a reserve for
certain classified loans to a single borrower. During 2001, reductions in
outstanding balances on those loans allowed for a reallocation of $370,000 of
that allowance. Net loan charge-offs were $253,000 in 2001 compared to
$208,000 in 2000. The ratio of net charge-offs to average loans outstanding
was 0.05% in each of the two years. At December 31, 2001, nonperforming and
restructured loans were $2,239,000 compared to $1,569,000 at December 31,
2000. The ratios of nonperforming and restructured loans to total loans were
0.38% at December 31,2001 compared to 0.33% at December 31, 2000. The ratios
of the allowance for loan losses to total loans were 1.94% at December 31,
2001 and 1.98% at December 31, 2000.
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 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.
301 Main Street, Salinas, California 93901
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CENTRAL COAST BANCORP
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
Statement of Income Data 2001 2000 2001 2000
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Interest income $ 12,331 $ 13,656 $ 51,747 $ 51,415
Interest expense 3,930 4,890 18,360 18,290
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Net interest income 8,401 8,766 33,387 33,125
Provision for loan losses 1,680 1,127 2,635 3,983
Noninterest income 777 583 3,129 2,433
Noninterest expense 4,759 4,654 19,223 17,408
Provision for taxes 680 1,214 5,149 5,241
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Net income $ 2,059 $ 2,354 $ 9,509 $ 8,926
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Share Data (adjusted for 10% stock dividend distributed on February 28, 2001)
Earnings per share
Basic $ 0.29 $ 0.32 $ 1.31 $ 1.17
Diluted $ 0.28 $ 0.31 $ 1.26 $ 1.14
Book value per common share $ 9.11 $ 8.09
Shares outstanding 7,171,000 7,394,000 7,171,000 7,394,000
Weighted average shares 7,172,000 7,436,000 7,237,000 7,612,000
Weighted average diluted shares 7,506,000 7,699,000 7,552,000 7,838,000
Balance Sheet Data
Total assets $ 802,266 $ 706,693
Securities, available-for-sale 137,153 152,276
Total loans, gross 606,300 473,395
Allowance for loan losses (11,753) (9,371)
Total deposits 724,862 633,210
Total shareholders' equity 65,336 59,854
Unrealized gain (loss) on securities available-for-sale, net (417) (1,062)
Nonperforming and restructured loans $ 2,329 $ 1,569
Other real estate owned 0 195
Selected Financial Ratios
Return on average total assets 1.06% 1.42% 1.31% 1.41%
Return on average equity 12.4% 16.1% 15.1% 16.0%
Net interest margin (tax equivalent basis) 4.81% 5.93% 5.15% 5.88%
Allowance for loan losses to total loans 1.94% 1.98%
Allowance for loan losses to NPL's 505% 597%
Allowance for loan losses to NPA's 505% 531%
Total risk based capital ratio 11.1% 12.3%
Tier 1 Capital ratio 9.9% 11.1%
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