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 19th CONSECUTIVE YEAR
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Salinas, California - January 22, 2003. 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, 2002. Net income for 2002
increased 10.7% to $10,528,000 from $9,509,000 in 2001. Diluted earnings per
share for 2002 increased 10.9% to $1.12 from $1.01 in 2001, as adjusted for
the 25% stock split distributed in February 2002. This is the 19th
consecutive year of higher year over year earnings since the Bank's first
year of operations in 1983. For 2002, the Company realized a return on
average equity of 14.5% and a return on average assets of 1.23%, as compared
to 15.1% and 1.31% for 2001.
Net income for the fourth quarter of 2002 increased 16.4% to $2,397,000 from
$2,059,000 in 2001. Diluted earnings per share for the fourth quarters of
2002 and 2001were $0.26 and $0.23, as adjusted for the 25% stock split
distributed in February 2002.
At December 31, 2002, the Company had total assets of $919,132,000, which was
an increase of $116,866,000 (14.6%) from year-end 2001. At December 31,
2002, loans totaled $745,353,000, up $139,053,000 (22.9%) from the ending
balances on December 31, 2001. Deposit growth in 2002, which is net of a
$20,000,000 decrease in State of California certificates of deposit, was
$101,640,000 (14.0%). Deposits totaled $826,502,000 at year-end 2002
compared to $724,862,000 at year-end 2001.
Nick Ventimiglia, Chairman and CEO, stated that, "As we approach the Bank's
20th anniversary in February and look back at where we have been, I am proud
of our accomplishments. We have had nineteen consecutive years of increased
earnings. We have grown from a single branch to twelve branches, with our
newest branch opening in downtown Monterey this week. As of the June 30,
2002 FDIC annual reporting period, Community Bank had moved from the fourth
largest to the third largest Bank in Monterey County with a deposit market
share of 15.3%. The Bank was just $6.1 million shy of being second." He
went on to say, "We appreciate the support and loyalty of our customers as
well as the dedication, hard work and professionalism of our directors and
staff, which have lead to these accomplishments."
Financial Summary:
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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 $1,119,000 and $1,102,000 in taxable
equivalent interest income on tax-free investments for the years ending
December 31, 2002 and 2001. Net interest income for 2002 was $37,665,000, a
$3,176,000 (9.2%) increase over 2001. The interest income component
decreased $1,229,000 in 2002 as the increase in level of earning assets was
unable to offset the year-over-year effect of the 475 basis point decrease in
prime rate in 2001 coupled with the additional 50 basis point decrease in
November of 2002. Average earning assets increased $126,523,000 (18.9%) in
2002, which added $10,922,000 in interest income. Over the same period, the
average rate received on earning assets decreased 141 basis points to 6.48%.
The lower rates reduced interest income by $12,151,000.
The impact on net interest income caused by the lower interest income during
2002 was more than offset by decreases in interest expenses on deposit
liabilities resulting in the overall increase in net interest income of
$3,176,000. While average balances of deposit bearing liabilities increased
$94,032,000 (19.5%), interest expense decreased $4,405,000 (-24.0%) in 2002
from 2001 mainly due to repricing of the time deposits as they matured
throughout the year. The average balance of time deposits increased
$15,675,000 during 2002 and as a result interest expense increased $807,000.
However, the average rate paid on time deposits decreased 192 basis points to
3.23%, which decreased interest expense $5,048,000. Overall, in 2002 the
average rate paid on interest-bearing liabilities was down 138 basis points
to 2.42%.
The net interest margin for 2002 decreased 42 basis points to 4.73% from
5.15% in 2001. The net interest margin for the 4th quarter of 2002 was 4.75%,
which was a decrease of 6 basis points from 4.81% in the 4th quarter of 2001
and down just one basis point from the 3rd quarter of 2002. Assuming no
further interest rate decreases in early 2003, management expects the net
interest margin to be consistent with the level during the second half of
2002.
The Bank provided $3,584,000 for loan losses in 2002 up from $2,635,000 in
2001. The provision in 2002 reflected the relative mix and continuing growth
in the loan portfolio and the continuing uncertain economy. The ratio of the
allowance for loan losses to total loans was 2.04% at December 31, 2002 and
1.94% at December 31, 2001. Nonperforming and restructured loans were
$1,820,000 at December 31, 2002, compared to $2,329,000 at December 31,
2001. The ratio of nonperforming and restructured loans to total loans at
December 31, 2002 and 2001 was 0.24% and 0.38%.
Noninterest income was up $536,000 (17.1%) in 2002 over the year 2001. The
increase was primarily due to increased service charges and mortgage
origination fees from increased business activity. Other noninterest income
increased slightly with the gains related to securities transactions and
sale of property being approximately equal on a year-over-year basis.
Noninterest expenses increased $1,273,000 (6.6%) in 2002 over 2001. The
operations of the Gilroy branch that opened in April of 2002 accounted for
$447,000 of the increase on a year-over-year basis. After adjusting for the
new branch, the noninterest expenses were $826,000 (4.3%) higher in 2002 due
to normal salary increases and higher costs as a result of increased business
activity. The efficiency ratio for 2002 improved to 49.6% from 51.1% in 2001.
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 (2), 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 accounting principles and procedures; (7) changes in business
conditions and inflation; (8) changes in securities
markets; (9) data processing compliance problems; (10) the California energy
problems; (11) variances in the actual versus projected growth in assets;
(12) return on assets; (13) loan losses; (14) expenses; (15) rates charged on
loans and earned on securities investments; (16) rates paid on deposits; and
(17) 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
CENTRAL COAST BANCORP
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
Three Months Ended Year Ended
December 31 December 31
Statement of Income Data 2002 2001 2002 2001
- ------------------------ ---- ---- ---- ----
Interest income
Loans (including fees) $ 11,593 $ 10,484 $44,141 $ 43,135
Investment securities 1,315 1,838 6,105 8,205
Other 43 8 255 407
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Total interest income 12,951 12,330 50,501 51,747
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Interest expense
Interest on deposits 3,165 3,790 13,517 17,926
Other 111 141 438 434
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Total interest expense 3,276 3,931 13,955 18,360
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Net interest income 9,675 8,399 36,546 33,387
Provision for loan losses 1,536 1,680 3,584 2,635
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Net interest income after
provision for loan losses 8,139 6,719 32,962 30,752
Noninterest income
Service charges on deposits 621 517 2,342 1,924
Other 323 260 1,323 1,205
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Total noninterest income 944 777 3,665 3,129
Noninterest expenses
Salaries and benefits 3,164 2,841 12,129 11,619
Occupancy 568 412 1,997 1,642
Furniture and equipment 472 447 1,802 1,833
Other 1,225 1,058 4,568 4,129
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Total noninterest 5,429 4,758 20,496 19,223
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Income before provision for
income taxes 3,654 2,738 16,131 14,658
Provision for income taxes 1,257 679 5,603 5,149
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Net income $ 2,397 $ 2,059 $10,528 $ 9,509
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Common Share Data(adjusted for 25% stock split distributed on February 28, 2002)
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Earnings per share
Basic $ 0.27 $ 0.23 $ 1.17 $ 1.05
Diluted $ 0.26 $ 0.23 $ 1.12 $ 1.01
Weighted average shares
outstanding 9,014,000 8,965,000 9,002,000 9,046,000
Weighted average shares
outstanding - diluted basis 9,413,000 9,383,000 9,420,000 9,440,000
Book value per share $ 8.66 $ 7.29
Tangible book value $ 8.63 $ 7.23
Shares outstanding 9,016,000 8,964,000
CENTRAL COAST BANCORP
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
December 31, December 31,
Balance Sheet Data 2002 2001
- ------------------ ---- ----
Assets
Cash and due from banks $ 63,915 $ 55,245
Federal funds sold 2,700 -
Available-for-sale securities - at fair 107,323 137,153
Loans:
Commercial 224,840 199,761
Real estate-construction 74,214 85,314
Real estate-other 433,921 306,622
Consumer 13,414 15,653
Deferred loan fees, net (1,036) (1,050)
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Total loans 745,353 606,300
Allowance for loan losses (15,235) (11,753)
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Net loans 730,118 594,547
Premises and equipment, net 2,959 2,962
Accrued interest receivable and other assets 12,117 12,359
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Total assets $919,132 $802,266
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Liabilities and Shareholders' Equity
Deposits:
Demand, noninterest bearing $261,242 $231,501
Demand, interest bearing 127,692 105,949
Savings 181,089 122,861
Time 256,479 264,551
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Total Deposits 826,502 724,862
Accrued interest payable and other liabilities 14,554 12,068
Shareholders' equity 78,076 65,336
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Total liabilities and
shareholders' equity $919,132 $802,266
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Asset Quality
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Loans past due 90 days
or more and accruing interest $ 5 $ 80
Nonaccrual loans 870 1,294
Restructured loans 945 955
Other real estate owned - -
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Total nonperforming assets $ 1,820 $ 2,329
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Allowance for loan losses to total loans 2.04% 1.94%
Allowance for loan losses to NPL's 837% 505%
Allowance for loan losses to NPA's 837% 505%
Regulatory Capital and Ratios
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Tier 1 capital 76,374 65,198
Total capital 86,314 73,518
Tier 1 capital ratio 9.7% 9.9%
Total risk based capital ratio 10.9% 11.1%
Tier 1 leverage ratio 8.6% 8.4%
CENTRAL COAST BANCORP
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
Three Months Ended Year Ended
December 31 December 31
Selected Financial Ratios 2002 2001 2002 2001
- ------------------------- ---- ---- ---- ----
Return on average total assets 1.07% 1.06% 1.23% 1.31%
Return on average equity 12.27% 12.39% 14.52% 15.11%
Net interest margin (tax
equivalent basis) 4.75% 4.81% 4.73% 5.15%
Efficiency ratio (tax
equivalent basis) 49.82% 50.31% 49.59% 51.10%
Selected Average Balances
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Loans $707,997 $573,259 $655,061 $513,077
Taxable investments 61,778 92,503 76,894 99,488
Tax-exempt investments 49,031 49,652 49,240 48,691
Federal funds sold 11,759 1,414 15,329 8,745
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Total earning assets $830,565 $716,828 $796,524 $670,001
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Total assets $891,133 $772,398 $858,009 $727,198
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Demand deposits - interest
bearing $129,881 $103,450 $128,192 $97,785
Savings 198,544 132,305 178,459 129,358
Time deposits 259,981 259,218 263,063 247,388
Other borrowings 7,544 13,200 7,345 8,496
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Total interest bearing
liabilities $595,950 $508,173 $577,059 $483,027
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Demand deposits -
noninterest bearing $208,421 $191,416 $202,397 $174,133
---------- ---------- --------- ---------
Equity $ 77,486 $ 65,957 $72,519 $62,918
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