CENTRAL COAST BANCORP
PRESS RELEASE Contact: Robert Stanberry
Chief Financial Officer
For Release 9:00 am EDT (831) 422-6642
CENTRAL COAST BANCORP ANNOUNCES RECORD QUARTERLY EARNINGS
Salinas, California - April 16, 2002. Central Coast Bancorp
(Nasdaq/CCBN), the holding company for Community Bank of Central
California, today announced record net income of $2,736,000 for the
quarter ended March 31, 2002. The earnings represent a 6.9% increase
over the $2,559,000 reported in the first quarter of 2001. Diluted
earnings per share for the first quarter of 2002 increased 11.5% to
$0.29 from $0.26 in the prior year period. The earnings per share for
the 2001 quarter have been adjusted for the 25% stock split distributed
in February 2002.
For the first quarter 2002, the Company realized a return on average
equity of 16.4% and a return on average assets of 1.37%, as compared to
16.9% and 1.52% in the first quarter of 2001.
The Company continued its strong asset growth in first quarter of 2002
as assets grew to $836,068,000 at March 31, 2002, up $33,802,000 (4.2%)
from year-end. At quarter end, loans totaled $619,580,000, up
$13,280,000 (2.2%) from year-end and up $137,971,000 (28.6%) from March
31, 2001. Deposits also had very strong growth in the first quarter as
they increased $29,496,000 (4.1%) from year-end to $754,358,000 at
March 31, 2002. The increase in deposits was accomplished in spite of
the maturity of a $10,000,000 State of California certificate of
deposit, which was included in the 2001 year-end balance.
"We are very pleased with the Company's operating results for the first
quarter," stated Nick Ventimiglia, Chairman, President and CEO. "Our
record quarterly earnings have been attained after 475 basis points of
rate decreases in 2001 and are due in large part to the effort the
staff has put forth in the past year in growing our Bank, serving our
customers and controlling costs. We have been able to grow loans
substantially, while maintaining a 0.37% ratio of nonperforming loans
to loans outstanding at quarter-end. Last year at this time we were
looking at a weakening economy and declining interest rates. Economic
conditions appear to be improving in the Company's market area.
Yesterday, we opened our eleventh branch in Gilroy and we look forward
to expanding our banking franchise in that southern area of Santa Clara
County."
Financial Summary:
Interest income, net interest income, net interest margin and the
efficiency ratio are adjusted to give effect to $281,000 in taxable
equivalent interest income on tax free investments and are discussed
below on a fully taxable equivalent basis. Net interest income for the
first quarter of 2002 was $8,563,000, a $189,000 (-2.2%) decrease from
first quarter of 2001. Interest income was down $1,490,000 (-10.9%).
Average earning assets in the first quarter of 2002 were $128,270,000
(20.6%) higher than the prior year period. The increased volume of
earning assets added $3,088,000 to interest income. However, the
interest due to higher volume was more than offset by the effect of a
232 basis point reduction in the average yield received on earning
assets in the first quarter of 2002 versus the same period in 2001. The
lower yield of 6.58% resulted in reducing interest income by
$4,578,000.
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Interest expense was $1,301,000 (26.4%) lower in the first quarter of
2002 from the prior year period. Average balances of interest-bearing
liabilities were higher by $98,027,000 (21.9%), which added $1,084,000
to interest expense. Average rates paid on interest-bearing
liabilities in the first quarter of 2002 were 2.69%, which were down
177 basis points from the first quarter of 2001. The lower rates
reduced interest expense by $2,385,000.
The net interest margin for the first quarter of 2002 was 4.62% as
compared to 5.69% in the year earlier period. Compared to the net
interest margin for the fourth quarter 2001, the first quarter's net
interest margin was down 19 basis points reflecting the effect of the
fourth quarter 2001 rate changes on the asset yields. As term
certificates of deposit reprice in the current interest rate
environment, we would expect a slightly favorable impact on the net
interest margin.
The Bank provided $223,000 for loan losses in the first quarter of 2002
as compared to $120,000 in the first quarter of 2001. At March 31,
2002, nonperforming and restructured loans totaled $2,271,000 as
compared to $1,478,000 at March 31, 2001. The ratios of the allowance
for loan losses to nonperforming loans at March 31, 2002 and 2001 were
535% and 638%, respectively. The ratio of the allowance for loan
losses to total loans was 1.96% at March 31, 2002 and 2001. The ratio
at December 31, 2001 was 1.94%.
Noninterest income was up $117,000 (18.0%) in the first quarter of 2002
versus the first quarter of 2001. In general, the increase was due to
higher volumes and some selective fee increases in service charges on
deposit accounts.
Noninterest expenses decreased $354,000 (7.2%) to a total of $4,585,000
in the first quarter of 2002 versus first quarter 2001. Costs were
down in all categories of noninterest expenses. The efficiency ratio
for the periods ended March 31, 2002 and 2001 was 49.1% and 52.5%,
respectively.
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; the Santa Clara County community of Gilroy; 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
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California energy problems; (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
March 31
Statement of Income Data 2002 2001
--------------------------
Interest income $ 11,907 $ 13,420
Interest expense 3,625 4,926
--------------------------
Net interest income 8,282 8,494
Provision for loan losses 223 120
Noninterest income 767 650
Noninterest expense 4,585 4,939
Provision for taxes 1,505 1,526
--------------------------
Net income $ 2,736 $ 2,559
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Share Data (adjusted for 25% stock split distributed on February 28, 2002)
Earnings per share
Basic $ 0.30 $ 0.28
Diluted $ 0.29 $ 0.26
Book value per common share $ 7.60 $ 6.76
Shares outstanding 8,992,000 9,117,500
Weighted average shares 8,975,000 9,198,000
Weighted average diluted shares 9,390,000 9,565,000
Balance Sheet Data
Total assets $ 836,068 $ 698,226
Securities, available-for-sale 132,652 148,600
Total loans, gross 619,580 481,609
Allowance for loan losses (12,144) (9,427)
Total deposits 754,358 624,669
Total shareholders' equity 68,305 61,668
Nonperforming and restructured loans $ 2,268 $ 1,478
Other real estate owned 0 0
Selected Financial Ratios
Return on average total assets 1.37% 1.52%
Return on average equity 16.4% 16.9%
Net interest margin (tax equivalent basis) 4.62% 5.69%
Allowance for loan losses to total loans 1.96% 1.96%
Allowance for loan losses to NPL's 535% 638%
Allowance for loan losses to NPA's 535% 638%
Total risk based capital ratio 11.1% 12.3%
Tier 1 Capital ratio 9.9% 11.0%
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