Exhibit 99.1
- ------------
July 22, 2002
FOR IMMEDIATE RELEASE
- ---------------------
MONTEREY BAY BANCORP, INC. ANNOUNCES:
SECOND QUARTER AND JUNE 30 YEAR TO DATE 2002 RESULTS;
RECORD LEVELS OF INCOME, ASSETS, LOANS, DEPOSITS, AND EQUITY
Common Stock Symbol: MBBC
NASDAQ National Market
Watsonville, CA. July 22, 2002. Monterey Bay Bancorp, Inc. ("Company"),
the holding company for Monterey Bay Bank ("Bank"), today reported record net
income of $1.35 million, equivalent to $0.38 diluted earnings per share, for the
quarter ended June 30, 2002, compared to net income of $949 thousand, or $0.29
diluted earnings per share, for the same period in 2001. Net income during the
quarter ended March 31, 2002 (the immediately preceding quarter) was $1.21
million, equivalent to $0.35 diluted earnings per share.
For the six months ended June 30, 2002, net income was $2.55 million,
equivalent to $0.73 diluted earnings per share. This compares to net income of
$1.55 million, or $0.47 diluted earnings per share, for the first six months of
2001. The 64.6% increase in net income for the first half of 2002 compared to
the same period in 2001 primarily resulted from two key factors:
o the continued implementation of the Company's strategic plan to transform
the Bank into a community commercial bank
o during the first half of 2001, the Company incurred pre-tax operating costs
of $447 thousand for the conversion of the core data processing system and
$161 thousand for legal expenses associated with the arbitration of claims
by a former executive
The second quarter of 2002 earnings were the highest of any quarter in
the Company's history. Annualized return on average stockholders' equity
improved from 8.14% during the second quarter of 2001 to 10.18% during the
second quarter of 2002. At June 30, 2002, the Company had record levels of
loans, assets, deposits, and stockholders' equity. Tangible book value per share
increased from $14.08 at December 31, 2001 to $15.00 at June 30, 2002.
During the second quarter of 2002, the Company continued the
implementation of its strategic plan of transforming the Bank into a community
focused commercial bank serving the financial needs of individuals, families,
and businesses. Key accomplishments during the second quarter of 2002 included:
o progress in shifting the composition of the loan portfolio
o greater loan volumes from the Los Angeles loan production office which was
opened in the first quarter of 2002
o increased local commercial banking business
5
Monterey Bay Bancorp, Inc. Page 2
Press Release
July 22, 2002
Net interest income increased from $4.8 million and $9.5 million during
the second quarter and first half of 2001 to $5.6 million and $10.9 million
during the same periods in 2002. These increases resulted from both expanded
spreads and greater average balances of interest earning assets and liabilities.
The Company's ratio of net interest income to average total assets was 3.98% for
the first six months of 2002, up from 3.81% for the same period in 2001. The
increased spread in part stemmed from the Bank's continued implementation of its
strategic plan, which incorporates a higher ratio of loans to total assets, a
smaller percentage of total loans being comprised of residential mortgages, and
transaction accounts constituting a greater portion of total deposits.
The Company recorded a $385 thousand provision for loan losses during
the second quarter of 2002, up from $300 thousand during the same period in the
prior year. For the first six months of 2002, the Company recorded $710 thousand
in provisions for loan losses, compared to $800 thousand during the same period
in 2001. Net charge-offs during the first half of 2002 totaled $32 thousand, of
which less than $1 thousand occurred in the second quarter. The Company's ratio
of loan loss reserves to total loans increased from 1.41% at December 31, 2001
to 1.50% at June 30, 2002. The primary factors contributing to the rise in this
ratio included:
o a shift in the Company's loan mix away from its historic concentration in
residential mortgages
o the establishment of a specific reserve for a loan secured by a hotel /
resort within the Company's primary market area, as subsequently discussed
o the Company's updating its formula general reserve factors during the
second quarter of 2002 to reflect current information regarding real estate
valuations, business conditions, rental and vacancy rates for various types
of income property, and other factors in estimating the amount of loss
inherent in the loan portfolio at June 30, 2002
The Company continues to closely monitor its portfolio of real estate
loans secured by hotel / motel / resort properties. The hospitality industry in
California has been particularly negatively affected by the combination of the
recent recession, higher energy costs, a general reduction in business and
vacation travel, and the difficulties being experienced by many companies in the
technology and telecommunications industries. At June 30, 2002, the Company had
$23.6 million in hotel / motel / resort real estate loans outstanding, down from
$30.8 million at December 31, 2001. This decrease in part resulted from the
Company's not repricing certain hotel / motel / resort loans to reflect the
decline in general market interest rates, thereby leading the borrowers to
refinance with other lenders.
Non-accrual loans increased from $2.3 million at December 31, 2001 to
$5.0 million at June 30, 2002 primarily due to the placement of a $2.3 million
commercial real estate mortgage on non-accrual status. This credit is a
participation loan where the Bank is not the lead financial institution. The
loan is secured by a first deed of trust on a hotel / resort located within the
Company's primary market area. The borrowers are directly personally indebted.
The hotel is a relatively new development that has experienced limited cash
flow. The hotel was also adversely impacted by the decline in tourism and travel
following the events of September 11, 2001 and the national economic recession.
6
Monterey Bay Bancorp, Inc. Page 3
Press Release
July 22, 2002
At June 30, 2002, the Company maintained a $754 thousand specific
reserve for this hotel / resort loan, based upon estimated net proceeds to the
Company following foreclosure and sale. The borrowers executed a forbearance
agreement during the second quarter of 2002. In conjunction with the forbearance
agreement, the borrowers made additional loan payments during the second quarter
of 2002, and a loan payment in early July 2002. The forbearance agreement calls
for additional payments and for the borrowers to provide additional real
property collateral before the end of the third quarter of 2002. The agent bank
has ordered an updated appraisal of the primary collateral, which is scheduled
to be received during the third quarter of 2002. The market value of the hotel /
resort is particularly volatile at this time, given the uncertainty regarding
the economy, the tourism industry, and the outlook for business travel activity.
Non-accrual loans at June 30, 2002 also included:
o An $846 thousand residential mortgage secured by a first deed of trust.
There are significant junior mortgages from other lenders secured by the
subject collateral, which is scheduled for foreclosure sale during the
third quarter of 2002.
o Four additional residential mortgages totaling $851 thousand. One of these
loans fully reinstated in early July 2002.
o An $842 thousand commercial real estate mortgage secured by a first deed of
trust. There is a significant junior mortgage from another lender secured
by the subject collateral. The borrower made several payments during the
second quarter of 2002, but was still delinquent at June 30, 2002.
o A $129 thousand loan secured by a first deed of trust on residential land.
Aside from the $2.3 million hotel / resort loan discussed above, the
Company does not anticipate recording a loss on any of the above non-accrual
loans due to the estimated value of the underlying real estate collateral. All
of the Company's non-accrual loans at June 30, 2002 were secured by real estate.
The Company had no foreclosed real estate at June 30, 2002.
Non-interest income totaled $503 thousand and $1.0 million during the
three and six months ended June 30, 2002, down from $695 thousand and $1.3
million during the same periods in 2001.
Customer service charge income was $392 thousand and $742 thousand
during the three and six months ended June 30, 2002, down from $473 thousand and
$882 thousand during the same periods in 2002. In conjunction with the
conversion to the new core data processing system in March 2001, the Company
implemented a revamped consumer checking product line and an associated revised
fee and service charge schedule. These changes contributed to the closing of
certain lower balance, recurring overdraft, and / or higher transaction volume
consumer checking accounts beginning in the second quarter of 2001, as such
accounts began incurring increased service charges.
Commissions from the sale of non-FDIC insured investment products were
$34 thousand and $75 thousand during the three and six months ended June 30,
2002, down from $71 thousand and $188 thousand during the same periods in 2001.
This decrease was primarily due to vacancies in positions for licensed
investment sales representatives and the general state of the equity markets in
the first six months of 2002. The Company expects revenue from these operations
to remain constrained during the third quarter of 2002.
7
Monterey Bay Bancorp, Inc. Page 4
Press Release
July 22, 2002
Loan servicing income totaled $14 thousand and $29 thousand during the
three and six months ended June 30, 2002, compared to $41 thousand and $43
thousand during the same periods in 2001. The Company continues to sell the vast
majority of its long term, fixed rate residential loan production into the
secondary market on a servicing released basis, and purchases more interest rate
sensitive loans as part of its interest rate risk management program. As a
result, the portfolio of loans serviced for others is declining as loans pay
off. At June 30, 2002, the Company serviced $34.9 million in various types of
loans for other investors, compared to $42.6 million at December 31, 2001. The
Company maintained loan servicing assets of $46 thousand at June 30, 2002, and
is thus limited in the exposure of its loan servicing income to a potential
further acceleration in loan prepayment rates.
Gains on the sale of loans were $21 thousand during the second quarter
of 2002, down from $24 thousand during the second quarter of 2001. For the first
six months of 2002, gains on the sale of loans totaled $48 thousand, a 65.5%
increase from the $29 thousand recorded during the first half of 2001. The
Company anticipates favorable results from its mortgage banking operations
during the third quarter of 2002, spurred by:
o the availability of thirty year fixed rate residential mortgages at rates
below 7.00% at the start of the quarter
o recent reports indicating strong demand for residential real estate in most
areas of California
There were no sales of mortgage backed or investment securities during
the second quarter of either 2002 or 2001. Gains on sale of mortgage backed
securities were $43 thousand during the first half of 2002, compared to $34
thousand during the same period in 2001. Although many of the Company's
securities appreciated during the second quarter of 2002 due to the decline in
most capital markets interest rates, the Company decided to retain the
securities as a means of generating net interest income.
Non-interest expense totaled $3.4 million and $6.9 million during the
three and six months ended June 30, 2002, comparing favorably to $3.5 million
and $7.4 million during the same periods in 2001. Factors contributing to the
lower expenses included the Company's incurring significant costs in the first
half of 2001 associated with its data processing conversion and the arbitration
of claims by a former executive.
Compensation and employee benefits costs were higher in the three and
six months ended June 30, 2002 than during the same periods the prior year due
to:
o compensation costs associated with the Los Angeles loan production office
which opened during the first quarter of 2002
o other staff additions and / or changes in support of the Company's
strategic plan, particularly in the Company's commercial banking and
information technology functions
o higher costs for the Bank's Employee Stock Ownership Plan due to the
greater average market price of the Company's common stock
o higher costs for payroll taxes on a greater compensation base
8
Monterey Bay Bancorp, Inc. Page 5
Press Release
July 22, 2002
While deposit insurance premiums increased slightly from the three and
six months ended June 30, 2001 to the same periods in 2002 due to expansion in
the deposit portfolio, the Company anticipates a significant percentage decline
in these costs during the latter half of 2002 due to an adjustment in its
premium rate.
Legal and accounting expenses were lower in the three and six months
ended June 30, 2002 than during the same periods in 2001 primarily due to the
aforementioned arbitration in 2001 and due to the Company's utilizing more cost
effective providers for certain professional services in 2002.
Advertising and promotion costs totaled $69 thousand and $145 thousand
during the three and six months ended June 30, 2002, up from $27 thousand and
$57 thousand during the same periods in 2001. These costs were unusually low in
the first half of 2001, as the Company postponed certain advertising and
promotional activities due to the implementation of the new computer systems
environment. Advertising during the second quarter of 2002 included newspaper
ads for deposit products and continued radio advertising in the Company's
primary market areas. The radio messages were targeted at attracting local
businesses through the Bank's relationship focused approach to providing
financial services. The Company's visibility was also enhanced during the first
half of 2002 by the extensive participation of employees and Directors in a
significant number of community events and organizations. As just one example,
more than twenty Bank employees actively participated in a fund raising event
for local non-profit organizations.
Consulting expenses declined from $63 thousand and $306 thousand during
the three and six months ended June 30, 2001 to $21 thousand and $43 thousand
during the same periods in 2002. In 2001, the Company hired several consultants
to assist with the core systems conversion and the implementation of
complementary technology following the conversion.
Total assets increased from $537.4 million at December 31, 2001 to a
record $562.8 million at June 30, 2002.
Cash and cash equivalents decreased from $13.1 million at December 31,
2001 to $10.4 million at June 30, 2002 due to the Company's using cash
equivalents to fund expansions in the security and loan portfolios.
Investment and mortgage backed securities increased from $37.9 million
at December 31, 2001 to $49.8 million at June 30, 2002. The Company purchased
relatively short duration, AAA rated collateralized mortgage obligations
("CMO's") during the first half of 2002 to serve as collateral for certain
deposits and to invest available liquidity. At June 30, 2002, the Company owned
no corporate bonds issued by WorldCom, Enron, or any other companies primarily
in the telecommunications, technology, or energy industries. The Company owned
two corporate bonds at June 30, 2002, both of which were trust preferred
securities issued by large financial institutions. These bonds were rated "A"
and "A-" by Standard & Poors at June 30, 2002.
Loans held for investment, net, increased from $465.9 million at
December 31, 2001 to a record $482.8 million at June 30, 2002. The increase
resulted from a combination of strong internal loan originations and from
purchases of, or participations in, individual income property and construction
loans from correspondent banks. Total net loans as a percentage of total assets
were 85.9% at June 30, 2002. The Company has targeted increasing this ratio as
part of its strategy of supporting its interest margin, fostering economic
activity in its local communities, and effectively utilizing the Bank's capital.
9
Monterey Bay Bancorp, Inc. Page 6
Press Release
July 22, 2002
The loan portfolio product mix shifted during the first half of 2002 in
conformity with the Company's strategic plan. Residential one to four unit loans
declined from 42.3% of gross loans at December 31, 2001 to 38.1% of gross loans
at June 30, 2002. In contrast, construction loans increased from 7.9% to 9.7%,
land loans increased from 2.5% to 3.7%, commercial loans rose from 1.8% to 2.6%,
and consumer loans (primarily home equity lines of credit) increased from 1.4%
to 1.9%. This change in loan mix was facilitated by the commercial business
relationship officers the Company hired last year and by the new Los Angeles
loan production office, which concentrates on income property and construction
lending. The Company plans to continue decreasing the percentage of its loan
portfolio allocated to residential mortgages in favor of other generally higher
yielding and more interest rate sensitive types of loans.
The Company concluded the second quarter of 2002 with a significant
loan pipeline. Management anticipates for the third quarter of 2002:
o a further rise in loans outstanding and total assets
o an increase in the ratio of loans to assets
o residential mortgages comprising a smaller percentage of total gross loans
Deposits increased from $432.3 million at December 31, 2001 to a record
$454.3 million at June 30, 2002. The majority of this increase was associated
with the Bank's issuance of its first brokered certificate of deposit ("CD")
during the second quarter of 2002. The Bank issued the $20.0 million one year CD
on an uncollateralized basis through one of the country's largest investment
banks / securities dealers at an all-in cost of LIBOR plus 12 basis points. The
brokered CD was issued in order to provide funding for anticipated loan
production in the second and third quarters of 2002. Funds not utilized during
the second quarter of 2002 were invested in short term, low duration, high cash
flow CMO's, leading to the $9.6 million increase in mortgage backed security
balances during the second quarter of 2002. While the Company does not intend to
become a significant issuer of brokered CD's, Management took advantage of the
opportunity due to:
o the Company's projected need for funding
o the efficiency of one relatively large issuance
o the attractiveness of the pricing
o the Company's loan to deposit ratio approaching 110%
o the one year term integrating effectively with the Company's asset /
liability management program
The Company continues to pursue increases in transaction account
balances as a fundamental component of the strategic plan. Excluding the impact
of the $20.0 million brokered CD, transaction accounts increased from 43.6% of
total deposits at December 31, 2001 to 45.3% of total deposits at June 30, 2002.
10
Monterey Bay Bancorp, Inc. Page 7
Press Release
July 22, 2002
Checking account balances increased from $63.6 million at December 31,
2001 to $68.4 million at June 30, 2002. The Company plans to introduce several
new consumer checking products during the third quarter of 2002, with a
particular focus on relationship pricing and providing increased choice and
options to customers. In addition, the Company's commercial lending officers
have increasing business demand deposit balances as a key component of their
sales objectives.
Money market deposits increased from $105.8 million at December 31,
2001 to $109.9 million at June 30, 2002. Money market balances decreased,
however, from $111.8 million at March 31, 2002. Factors supporting the rise in
money market balances in the first half of 2002 included the Company's active
cross-selling of this product in its branches and the desire by certain
customers to avoid committing funds to term certificates of deposit in the
current historically low interest rate environment. Factors contributing to the
decline in money market deposit balances during the second quarter of 2002
included the April payment of property and income taxes by customers and the
continued aggressive pricing and extensive advertising of certain consumer
transaction account products at rates far above market by two large thrifts
operating in the Company's primary market area.
The Company's ratio of net loans to deposits was 106.38% at June 30,
2002. The Company intends to actively manage this ratio in coming quarters by:
o pursuing opportunities for additional branch locations, either de novo or
acquisition of existing branches from other financial institutions
o directing a higher percentage of the advertising and promotion budget to
deposit generation
o introducing remote deposit collection services via a correspondent bank for
customers introduced to the Company via the Los Angeles loan production
office
Borrowings were $53.8 million at December 31, 2001 and June 30, 2002.
During the second quarter of 2002, the Company prepaid a $5.0 million FHLB
advance originally scheduled to mature in July 2002, and entered into a new $5.0
million FHLB advance with a maturity date in June 2003 in conjunction with its
asset / liability management program. All of the Company's FHLB advances at June
30, 2002 were fixed rate, fixed term borrowings without call or put option
features.
Monterey Bay Bank continues to be in the highest regulatory capital
classification of "Well Capitalized", with capital levels significantly in
excess of regulatory requirements.
11
Monterey Bay Bancorp, Inc. Page 8
Press Release
July 22, 2002
Consolidated stockholders' equity increased from $50.2 million at
December 31, 2001 to a record $53.5 million at June 30, 2002 due to a
combination of:
o net income
o continued amortization of deferred stock compensation
o additional paid-in capital generated through the accounting for the
Employee Stock Ownership Plan
o Directors continuing to receive their retainer fees in Company common stock
o the exercise of 34,630 vested stock options
o appreciation in the portfolio of securities classified as available for
sale
The above factors more than offset the impact of the repurchase of
5,000 shares of the Company's common stock at $16.25 per share during the first
quarter of 2002. The Company did not repurchase any shares during the second
quarter of 2002. At June 30, 2002, there were 109,035 remaining shares
authorized for repurchase under the Company's current repurchase program.
In reviewing the most recent quarter, C. Edward Holden, the Company's
Chief Executive Officer and President, commented: "The Company achieved
additional progress in implementing our strategy of transforming the Bank into a
community based financial services firm. The Bank's focus on increasing income
property, construction, and commercial lending led to a record level of loans
outstanding and to a meaningful shift in the composition of the loan portfolio
toward higher yielding and more interest sensitive types of loans. Our
relationship oriented approach to providing financial services continues to
attract new customers. The Company generated improved profitability versus prior
periods, enhanced by the multiple steps implemented in support of the strategic
plan. I am particularly pleased with our annualized return on average equity
exceeding 10.00% during the second quarter of 2002, and with the improvement in
the Company's efficiency ratio to 56.12% during the most recent quarter. While
we readily acknowledge the need to continue improving these figures, our
progress from the results of just one year ago is substantial. During the
remainder of 2002, we plan to implement additional initiatives aimed at
improving efficiency, enhancing customer service, generating additional revenue,
and further contributing to the quality of life in the local communities we
serve."
Mr. Holden then added: "The Company remains firmly committed to quality
credit management and the maintenance of a strong credit culture, which assume
even greater value and importance at this point in the economic cycle. The
Company also remains firmly committed to enhancing stockholder value, as
exemplified by the active stock repurchase authorization, Directors continuing
to receive retainer fees in Company stock, stock based compensation representing
a significant component of Management's compensation, and the growth of the
Company as one avenue to effectively deploy the rising capital base."
12
Monterey Bay Bancorp, Inc. Page 9
Press Release
July 22, 2002
McKenzie Moss, Chairman of the Board of Directors, remarked: "The
Company's commitment to enhancing stockholder value was also reflected during
the second quarter by the issuance of research coverage by a second investment
bank and by the Company's continuing to seek market makers to support the
liquidity of its common stock. While the Board of Directors is pleased to be
able to report record quarterly earnings, we recognize that additional progress
needs to be achieved in order for the Company to deliver a return on average
equity competitive with higher performing peer firms in the financial services
industry."
The Company's common stock is listed on the NASDAQ National Market
under the symbol "MBBC". The Company and the Bank are headquartered in
Watsonville, California. The Bank operates through its administrative offices in
Watsonville, one stand-alone loan production office in Los Angeles, and eight
full service branches located in the Greater Monterey Bay Area of Central
California. The Bank operates 11 ATM's including two at remote (non-branch)
sites. The Bank also offers customer access via bilingual telephone banking,
Internet banking, and worldwide ATM networks. The Bank's deposits are insured by
the Federal Deposit Insurance Corporation ("FDIC") to the maximum extent allowed
by law.
Certain of the statements contained herein that are not historical
facts are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act. Forward-looking statements are typically
identified by words or phrases such as "believe", "expect", "anticipate",
"intend", "estimate", "target", "plan", "may increase", "may fluctuate", "may
result in", "are projected", and similar expressions. The Company's actual
results may differ materially from those included in the forward-looking
statements. These forward-looking statements involve risks and uncertainties
including, but not limited to, the economic, business, and real estate market
conditions in the Company's market areas, competition, regulatory and
legislative actions, the possibility that the Company will not be successful in
achieving its strategic objectives, actions by investment banking firms, the
performance and contributions of employees, the Company's ability to recruit
high caliber bankers, expected loan payments, loan originations, and future
collateral values, the successful future utilization and efficacy of new
technology, and other factors discussed in documents filed by the Company with
the Securities and Exchange Commission from time to time, including the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001
and the quarterly Form 10-Q's filed by the Company . The Company does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated events or
circumstances after the date of such statements.
13
Monterey Bay Bancorp, Inc. Page 10
Press Release
July 22, 2002
This news release is available at the www.montereybaybank.com Internet
site and is included as an Exhibit to a Form 8-K filed with the Securities &
Exchange Commission that is available at the www.sec.gov Internet site.
For further information contact:
C. Edward Holden Mark R. Andino
Chief Executive Officer or Chief Financial Officer
President Treasurer
(831) 768 - 4840 (831) 768 - 4806
ed.holden@montereybaybank.com mark.andino@montereybaybank.com
General communication:
INFO@MONTEREYBAYBANK.COM
www.montereybaybank.com
Phone: (831) 768 - 4800
Fax: (831) 722 - 6794
--- financial data follows ---
14
MONTEREY BAY BANCORP, INC.
(NASDAQ: MBBC)
Consolidated Financial Highlights
Unaudited
(Dollars In Thousands)
June 30, December 31,
Financial Condition Data 2002 2001
- ------------------------------------------------------------------- --------- ---------
Cash and cash equivalents $ 10,423 $ 13,079
Investment securities available for sale 7,240 7,300
Mortgage backed securities available for sale 42,553 30,644
Loans held for sale 480 713
Loans receivable held for investment:
Residential one to four unit real estate loans 192,551 204,829
Multifamily five or more units real estate loans 112,024 103,854
Commercial and industrial real estate loans 110,276 109,988
Construction loans 49,117 38,522
Land loans 18,692 11,924
Commercial loans 13,277 8,843
Other loans 9,711 6,980
--------- ---------
Sub-total gross loans held for investment 505,648 484,940
(Less) / Plus:
Undisbursed construction loan funds (15,632) (12,621)
Unamortized purchase premiums, net of purchase discounts 596 435
Deferred loan fees and costs, net (479) (202)
Allowance for loan losses (7,343) (6,665)
--------- ---------
Loans receivable held for investment, net 482,790 465,887
Investment in capital stock of the Federal Home Loan Bank 3,302 2,998
Accrued interest receivable 2,955 2,915
Premises and equipment, net 7,387 7,618
Core deposit intangibles, net 1,174 1,514
Real estate acquired via foreclosure, net -- --
Other assets 4,451 4,723
--------- ---------
Total assets $ 562,755 $ 537,391
========= =========
Non-interest bearing demand deposits $ 21,897 $ 21,062
Interest bearing NOW checking accounts 46,514 42,557
Savings accounts 18,301 19,127
Money market accounts 109,871 105,828
Certificates of deposit 257,687 243,765
--------- ---------
Total deposits 454,270 432,339
FHLB advances and other borrowings 53,775 53,800
Other liabilities 1,164 1,090
--------- ---------
Total liabilities 509,209 487,229
--------- ---------
Stockholders' equity 53,546 50,162
--------- ---------
Total liabilities and stockholders' equity $ 562,755 $ 537,391
========= =========
15
MONTEREY BAY BANCORP, INC.
(NASDAQ: MBBC)
Consolidated Financial Highlights, Continued
Unaudited
(Dollars In Thousands Except Per Share Amounts)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- --------------------------
Operating Data 2002 2001 2002 2001
- ------------------------------------------------------ ---------- ---------- ---------- ----------
Interest income $ 8,891 $ 9,710 $ 17,646 $ 19,705
Interest expense 3,328 4,937 6,733 10,180
---------- ---------- ---------- ----------
Net interest income before provision for loan losses 5,563 4,773 10,913 9,525
Provision for loan losses 385 300 710 800
---------- ---------- ---------- ----------
Net interest income after provision for loan losses 5,178 4,473 10,203 8,725
---------- ---------- ---------- ----------
Non-interest income:
Gain on sale of mortgage backed securities -- -- 43 34
Commissions from sales of non-insured products 34 71 75 188
Customer service charges 392 473 742 882
Income from loan servicing 14 41 29 43
Gain on sale of loans held for sale 21 24 48 29
Other income 42 86 78 163
---------- ---------- ---------- ----------
Total non-interest income 503 695 1,015 1,339
---------- ---------- ---------- ----------
Non-interest expense:
Compensation and employee benefits 1,832 1,655 3,737 3,313
Occupancy and equipment 410 432 834 782
Deposit insurance premiums 51 49 102 98
Data processing fees 141 170 277 612
Legal and accounting expenses 102 267 221 451
Supplies, postage, telephone, and office
expenses 179 162 347 352
Advertising and promotion 69 27 145 57
Amortization of intangible assets 170 170 341 341
Consulting 21 63 43 306
Other expense 429 525 823 1,051
---------- ---------- ---------- ----------
Total non-interest expense 3,404 3,520 6,870 7,363
---------- ---------- ---------- ----------
Income before provision for income taxes 2,277 1,648 4,348 2,701
Provision for income taxes 930 699 1,795 1,150
---------- ---------- ---------- ----------
Net income $ 1,347 $ 949 $ 2,553 1,551
========== ========== ========== ==========
Shares applicable to basic earnings per share 3,375,688 3,262,003 3,362,038 3,244,622
Basic earnings per share $ 0.40 $ 0.29 $ 0.76 $ 0.48
========== ========== ========== ==========
Shares applicable to diluted earnings per share 3,509,181 3,300,595 3,487,234 3,287,577
Diluted earnings per share $ 0.38 $ 0.29 $ 0.73 $ 0.47
========== ========== ========== ==========
16
MONTEREY BAY BANCORP, INC.
(NASDAQ: MBBC)
Selected Ratios And Other Data
Unaudited
(Dollars In Thousands Except Per Share Amounts)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- --------------------------
2002 2001 2002 2001
---- ---- ---- ----
Profitability Ratios [1]
- ------------------------------------------
Return on average assets 0.96% 0.75% 0.93% 0.62%
Return on average equity 10.18% 8.14% 9.78% 6.84%
Interest rate spread during the period 3.92% 3.62% 3.92% 3.64%
Net interest income / average total assets 3.98% 3.79% 3.98% 3.81%
Net interest margin 4.18% 4.01% 4.19% 4.02%
Efficiency ratio 56.12% 64.37% 57.60% 67.77%
Other Information
- ------------------------------------------
Average total assets $ 559,061 $ 503,666 $ 548,277 $ 499,905
Average interest earning assets $ 532,332 $ 476,385 $ 521,437 $ 473,482
June 30, December 31,
2002 2001
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Asset Quality Information
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Non-accrual loans $ 4,979 $ 2,252
Non-performing loans $ 4,979 $ 2,252
Real estate acquired via foreclosure -- --
Allowance for loan losses $ 7,343 $ 6,665
Non-performing loans /
total assets 0.88% 0.42%
Allowance for loan losses /
loans outstanding 1.50% 1.41%
Allowance for loan losses /
non-accrual loans 147.48% 295.96%
Bank Regulatory Capital Ratios
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Tangible capital ratio 8.45% 8.24%
Core capital ratio 8.45% 8.24%
Tier one risk based capital ratio 11.79% 11.38%
Total risk based capital ratio 13.04% 12.64%
Other Information
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Full-service customer facilities 8 8
Stand alone loan production offices 1 --
Number of ATM's 11 11
Loan to deposit ratio 106.38% 107.92%
Tangible book value per share $ 15.00 $ 14.08
Shares outstanding 3,491,031 3,456,097
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[1] All applicable ratios reflect annualized figures.
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