Exhibit 99.1
- ------------
April 24, 2003
FOR IMMEDIATE RELEASE
- ---------------------
MONTEREY BAY BANCORP, INC. ANNOUNCES:
FIRST QUARTER 2003 RESULTS;
RECORD LEVELS OF LOANS, ASSETS, DEPOSITS, AND INCOME
Common Stock Symbol: MBBC
NASDAQ National Market
Watsonville, CA. April 24, 2003. Monterey Bay Bancorp, Inc.
("Company"), the holding company for Monterey Bay Bank ("Bank"), today reported
net income of $1.84 million, equivalent to $0.52 diluted earnings per share, for
the quarter ended March 31, 2003, compared to net income of $1.21 million, or
$0.35 diluted earnings per share, for the same period in 2002. Net income during
the quarter ended December 31, 2002 (the immediately preceding quarter) was
$1.62 million, equivalent to $0.46 diluted earnings per share. The earnings for
the first quarter of 2003 were the highest of any quarter in the Company's
history.
As announced on April 8, 2003, the Company has executed a definitive
agreement and plan of merger with Union Bank of California and UnionBanCal
Corporation, the holding company for Union Bank of California, to merge the
Company into Union Bank of California subject to the terms of the agreement and
following the receipt of regulatory approvals and an affirmative vote by the
Company's stockholders.
The Company will hold its previously announced annual meeting of
stockholders on Thursday, May 22, 2003 at 9:00 AM Pacific Time in Watsonville.
Proxy statements for this annual meeting were distributed on April 11, 2003 to
stockholders as of March 26, 2003, the Record Date for the annual meeting. A
separate special meeting of stockholders will be called later in 2003 for
stockholders to vote on the proposed merger.
First quarter results were favorably impacted by the continued
implementation of the Company's strategic plan to transform the Bank into a
community commercial bank with a focus on relationship banking and strong
commitment to community involvement. First quarter results were also affected by
several non-recurring items:
o a $114 thousand gain on sale of the Company's one foreclosed property held
at December 31, 2002
o a total of $192 thousand in one-time personnel expenses associated with the
adoption of certain non-qualified benefits during the first quarter of 2003
and a special bonus, approved by the Board of Directors, issued to the
Chief Executive Officer
In addition, first quarter 2003 results were favorably impacted by
record mortgage banking income and by the first full quarter of income from the
Company's recent investment in bank owned life insurance.
Monterey Bay Bancorp, Inc. Page 2
Press Release
April 24, 2003
Return on average total assets (annualized) ("ROA") increased from
0.90% for the first quarter of 2002 to 1.20% for the first quarter of 2003. ROA
was 1.11% for the fourth quarter of 2002. Return on average stockholders' equity
(annualized) ("ROE") improved from 9.37% for the first quarter of 2002 to 12.73%
for the first quarter of 2003. ROE was 11.64% for the fourth quarter of 2002. At
March 31, 2003, the Company had record levels of loans, assets, deposits, and
stockholders' equity. Tangible book value per share increased from $16.00 at
December 31, 2002 to $16.64 at March 31, 2003.
During the first quarter of 2003, 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,
local organizations, and businesses. Key accomplishments during the first
quarter included:
o growth in net loans held for investment
o significant progress in shifting the composition of the loan and deposit
portfolios
o continued improvement in the Company's efficiency ratio
o maintenance of strong credit quality
Net interest income increased from $5.4 million during the first
quarter of 2002 to $6.2 million during the first quarter of 2003. This increase
resulted from both expanded spreads and growth in the average balances of
interest earning assets and liabilities. The Company's ratio of net interest
income to average total assets was 4.02% for the first quarter of 2003, up from
3.98% for the same period in 2002. The Company's net interest margin increased
more significantly, rising from 4.19% during the first quarter of 2002 to 4.27%
during the first quarter of 2003. The Company's purchase of $9.0 million in bank
owned life insurance during the fourth quarter of 2002 moderated the improvement
in the ratio of net interest income to average total assets. The increased net
interest income during the first quarter of 2003 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 $325 thousand provision for loan losses during
both the first quarter of 2003 and 2002. The Company's ratio of loan loss
reserves to total loans was 1.54% at both March 31, 2003 and December 31, 2002,
and was 1.46% at March 31, 2002. Factors contributing to the level of the
Company's provision for loan losses during the first quarter of 2003 included:
o the continued shift in the Company's loan mix away from its historic
concentration in residential mortgages
o a $58 thousand increase in the specific reserve for a loan secured by a
hotel / resort within the Company's primary market area, as subsequently
discussed
o $51 thousand in net charge-offs during the first quarter of 2003
Monterey Bay Bancorp, Inc. Page 3
Press Release
April 24, 2003
Non-performing loans increased from $2.6 million at December 31, 2002
to $2.9 million at March 31, 2003 due to the Company's restructuring $342
thousand in loans to a commercial banking customer. This customer, located in
the Company's primary market area, recently made significant capital investments
to support the long term growth of the business, and in so doing experienced
reduced liquidity. In conjunction with the restructure, the Company obtained
additional real estate collateral.
Non-accrual loans were $2.6 million at both March 31, 2003 and December
31, 2002. Non-accrual loans at March 31, 2003 included a $2.3 million commercial
real estate mortgage. 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 and by a first
deed of trust on a residential lot located in California. The borrowers are
directly personally indebted. The hotel / resort has experienced limited cash
flow, and has been adversely impacted by the decline in tourism and travel
during the past two years.
At March 31, 2003, the Company maintained a $520 thousand specific
reserve for this hotel / resort loan, based upon estimated net proceeds
following foreclosure and sale. This specific reserve increased from $462
thousand at December 31, 2002 due to the borrower's failure to pay all real
estate taxes when due. Although the loan was current in its payments at March
31, 2003, the Company continues to maintain the loan on non-accrual status due
to concern about the future net cash flow of the hotel / resort, particularly in
light of the status of the economy, the tourism industry, and the outlook for
business travel activity. These factors also create particular volatility in the
market value of the hotel / resort.
Non-accrual loans at March 31, 2003 also included:
o a residential mortgage with a principal balance of $199 thousand
o a $129 thousand loan secured by a first deed of trust on residential land
The $199 thousand residential mortgage fully reinstated during the
first quarter of 2003, but was maintained on non-accrual status at March 31,
2003 because of prior chronic delinquency. The $129 thousand loan secured by
residential land was paid off in full early in the second quarter of 2003.
At December 31, 2002, the Company had one foreclosed property with a
book value of $846 thousand. This property was a custom single family home that
was sold during the first quarter of 2003, with the Company realizing a $114
thousand gain on sale. The Company owned no real estate acquired via foreclosure
at March 31, 2003.
Non-interest income totaled $835 thousand during the first quarter of
2003, comparing favorably to $512 thousand for the same period in 2002.
Monterey Bay Bancorp, Inc. Page 4
Press Release
April 24, 2003
Customer service charge income increased from $351 thousand during the
first quarter of 2002 to $394 thousand during the same period in 2003. The rise
primarily resulted from increased charges on deposit accounts and higher debit
card income. The Company has conducted an ongoing debit card education and sales
campaign in recent quarters to foster increased customer utilization of this
convenient and flexible service.
Gains on the sale of loans were $123 thousand during the first quarter
of 2003, up from $27 thousand during the first quarter of 2002. Mortgage banking
income during the first quarter of 2003 benefited from the historically low
interest rate environment and a high general level of mortgage refinance
activity. Beginning in 2003, the Company commenced offering a greater variety of
residential mortgages under an expanded relationship with a secondary market
conduit. This expansion was pursued in light of the Company's desire to continue
reducing the percentage of total loans held for investment comprised of
residential mortgages while at the same time continuing to meet the home
financing needs of its local communities. The Company anticipates continued
favorable results from its mortgage banking operations during the second quarter
of 2003 based upon its pipeline at March 31, 2003 and the continued availability
of fifteen and thirty year fixed rate residential loans at rates below 6.00%.
Income from bank owned life insurance was $113 thousand during the
first quarter of 2003, following the Bank's initial investment in December 2002.
Commissions from the sale of non-FDIC insured investment products were
$28 thousand during the first quarter of 2003, down from $41 thousand during the
first quarter of 2002. The capital markets environment, particularly the weak
equity markets, and the Company's continuing vacancies for licensed investment
sales representatives constrained this source of income.
Loan servicing income totaled $12 thousand during the three months
ended March 31, 2003, down from $14 thousand during the same period in 2002. 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 continues to decline as loans pay off. At March 31, 2003, the Company
serviced $31.4 million in various types of loans for other investors, down from
$35.3 million at December 31, 2002 and $37.3 million at March 31, 2002. The
Company maintained loan servicing assets of $31 thousand at March 31, 2003, and
is thus limited in its exposure of loan servicing income to the accelerated loan
prepayment speeds now occurring as a result of the low interest rate environment
and high volume of residential mortgage refinance activity.
Gain on sale of mortgage backed securities declined from $43 thousand
during the first quarter of 2002 to $1 thousand during the first quarter of
2003. The Company sold one $494 thousand par value Agency collateralized
mortgage obligation ("CMO") during the first quarter of 2003, compared to one
$2.7 million par value private label CMO during the first quarter of 2002. The
sale in first quarter of 2003 was associated with the Bank's management of its
collateral for certain deposits, while the sale in the first quarter of 2002 was
in conjunction with the Company's interest rate risk management program.
Although the market value of many of the Company's mortgage backed securities
exceeded historic carrying cost during the first quarter of 2003, the Company
retained the securities as a means of generating net interest income.
Monterey Bay Bancorp, Inc. Page 5
Press Release
April 24, 2003
Non-interest expense rose from $3.5 million in the first quarter of
2002 to $3.6 million in the first quarter of 2003 primarily due to increased
compensation and employee benefit costs. Compensation and employee benefits
costs were higher due to:
o one-time costs totaling $152 thousand associated with the adoption of
certain non-qualified benefits for the Chief Executive Officer and the
Chief Financial Officer
o recurring costs of $30 thousand associated with the accrual of
non-qualified retirement benefits obligations that were created during the
first quarter of 2003
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 greater base salary costs associated with staff additions and changes in
support of the Company's strategic plan, particularly in the Company's
income property lending and retail banking functions
o increased expenses for worker's compensation insurance, which is a general
problem faced by businesses in the State of California
Deposit insurance premiums decreased from $51 thousand during the first
quarter of 2002 to $19 thousand during the same period in 2003, despite the
expansion in the Company's deposit portfolio. The decline resulted from an
adjustment in the Company's insurance premium rate effective July 1, 2002.
Advertising and promotion costs totaled $37 thousand during the first
quarter of 2003, down from $81 thousand during the same period in the prior
year. Advertising expenses during the first quarter of 2003 were concentrated in
print advertising for consumer deposits. Advertising expenses were higher in the
first quarter of 2002 in conjunction with a radio campaign that focused upon
communicating the Bank's expanded product line.
Other non-interest expense decreased from $412 thousand during the
first quarter of 2002 to $333 thousand during the first quarter of 2003. Over
the past year, the Company has implemented a number of expense control and
efficiency initiatives that moderated various operating costs. In addition,
costs were lower in the first quarter of 2003 than during the first quarter of
2002 for consulting, recruiting, and temporary labor expenses.
In conjunction with the Company's strategic plan, the Company's
employees and Directors enhanced the Bank's visibility during the first quarter
of 2003 by their extensive participation in a significant number of community
events and organizations. As just one example, the Company fielded seven
four-person teams to raise money for a community organization committed to
helping disadvantaged children in Santa Cruz County. In the second quarter of
2003, the Company plans to extensively participate in the Human Race Walkathon
in both Santa Cruz and Monterey Counties, raising funds for local charities.
The Company's effective book tax rate during the first quarter of 2003
was 40.0%, compared to 41.8% during the same period the prior year. The
Company's effective book tax rate is expected to be moderated in 2003 by the
dividends earned on bank owned life insurance. These dividends are not subject
to normal Federal and State income tax.
Monterey Bay Bancorp, Inc. Page 6
Press Release
April 24, 2003
The Company's efficiency ratio improved from 59.13% during the first
quarter of 2002 to 51.67% during the first quarter of 2003. The improvement in
this ratio primarily stemmed from the expansion in the Company's net interest
margin, efficiency improvements implemented, and by the historically strong
level of non-interest income generated during the first quarter of 2003.
Total assets increased from $609.7 million at December 31, 2002 to a
record $625.8 million at March 31, 2003.
Cash and cash equivalents decreased from $11.4 million at December 31,
2002 to $9.8 million at March 31, 2003 due to the use of cash equivalents to
fund expansions in the security and loan portfolios.
Investment and mortgage backed securities increased from $44.5 million
at December 31, 2002 to $47.3 million at March 31, 2003. The Company purchased
Agency issued, AAA rated CMO's and balloon mortgage backed securities during the
first quarter of 2003 to serve as collateral for certain deposits, invest
available liquidity, and more effectively utilize the Company's capital
position. The Company owned two corporate bonds at March 31, 2003, both of which
were variable rate, trust preferred securities issued by large financial
institutions. These bonds reprice quarterly based upon LIBOR and were rated "A"
and "A-" by Standard & Poors at March 31, 2003.
Loans held for investment, net, increased from $521.9 million at
December 31, 2002 to a record $538.7 million at March 31, 2003. The increase
resulted from a combination of internal loan originations, including activity
from the Los Angeles loan production office, and from purchases of individual
income property loans from correspondent banks. In addition, during the first
quarter of 2003, the Company purchased a $15.5 million pool of high credit
quality, seasoned hybrid residential mortgages secured by first deeds of trust
on California homes in order to better utilize the Company's capital, support
the Bank's Qualified Thrift Lender ("QTL") ratio, and offset historically high
loan payoff volumes stemming from the low interest rate environment. These loans
were also purchased in conjunction with the Company's interest rate risk
management program, as the Company sought to slightly increase its asset
duration during a period of historically high prepayment speeds.
Total net loans as a percentage of total assets were 86.2% at March
31,2003, up slightly from 85.9% at December 31, 2002. The Company has targeted
increasing this ratio to 90.0% as part of its strategy of supporting its
interest margin, fostering economic activity in its local communities, and
effectively utilizing the Bank's capital.
The loan portfolio product mix shifted during the first quarter of 2003
in conformity with the Company's strategic plan. Residential one to four unit
loans declined from 33.1% of gross loans held for investment at December 31,
2002 to 30.3% at March 31, 2003. In contrast, multifamily loans rose from 20.8%
to 23.9% and construction loans increased from 12.3% to 14.1%. This change in
loan mix was facilitated by the business relationship officers the Company hired
over the past eighteen months and by the Los Angeles loan production office,
which concentrates on income property and construction lending.
Monterey Bay Bancorp, Inc. Page 7
Press Release
April 24, 2003
The cash surrender value of the Bank's investment in bank owned life
insurance increased by $113 thousand during the first quarter of 2003,
representing a 5.0% annualized rate of return which is not subject to normal
Federal and State income taxes. The insurance was purchased to fund:
o non-qualified supplemental executive retirement benefits for the Chief
Executive Officer and Chief Financial Officer that were implemented by the
Company in early 2003
o the increasing expense of the tax qualified Employee Stock Ownership Plan,
with associated costs rising due to the higher market price of the
Company's common stock
In addition, the Bank owned life insurance policies provide significant key man
insurance to the Company.
Deposits increased from $458.3 million at December 31, 2002 to a record
$477.7 million at March 31, 2003. This increase was primarily due to:
o the Bank's issuance of $10.8 million in brokered certificates of deposit to
assist in funding expansion in the security and loan portfolios
o a $17.2 million rise in money market account balances during the first
quarter of 2003
The rise in money market deposit balances resulted from a focused sales
calling program that included active participation by the Bank's management
team, certain customers preferring to avoid committing to term certificates of
deposit in the current historically low interest rate environment, and customers
building liquid balances in preparation for the payment of real estate and
income taxes in April.
The Company continues to pursue increases in transaction account
balances as a fundamental component of its strategic plan. Transaction accounts
increased from 46.2% of total deposits at December 31, 2002 to 48.2% of total
deposits at March 31, 2003 despite the issuance of the $10.8 million in brokered
certificates of deposit. This shift in mix contributed to the Company's reducing
its weighted average cost of deposits from 2.05% during the fourth quarter of
2002 to 1.82% during the first quarter of 2003. This 23 basis point reduction in
deposit cost was attained despite the historically low level of interest rates
and therefore the Company's limited ability to decrease interest rates on many
deposit products that are currently priced between zero and one percent.
During 2003, the Company hired a new Director of Retail Banking and
several new branch managers with significant commercial banking experience.
These new employees were recruited to increase the pace of deposit generation,
facilitate the change in mix of the deposit portfolio, and more effectively sell
and service a broader product line, including an expanded roster of products for
local businesses.
The Company's ratio of net loans to deposits was 112.86% at March 31,
2003, declining from 114.21% at December 31, 2003. The Company intends to
continue actively managing this ratio by:
o pursuing the opening of a de novo branch in Pacific Grove, in the Company's
primary market area
o directing a significant percentage of the advertising and promotion budget
to deposit generation
o selling a greater percentage of total residential loan production into the
secondary market
Monterey Bay Bancorp, Inc. Page 8
Press Release
April 24, 2003
Early in the second quarter of 2003, the Bank received regulatory
approval from the Office of Thrift Supervision, its primary federal regulator,
to open the planned branch in Pacific Grove, and was nearing the completion of
lease negotiations for the site.
Borrowings decreased from $93.8 million at December 31, 2002 to $88.4
million at March 31, 2003. The increase in deposits and the sale of the
foreclosed property provided funding to repay certain short term borrowings. All
of the Company's FHLB advances at March 31, 2003 were fixed rate, fixed term or
overnight 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. All of the Bank's regulatory capital ratios
increased from December 31, 2002 to March 31, 2003.
Consolidated stockholders' equity increased from $56.1 million at
December 31, 2002 to a record $58.2 million at March 31, 2003 due to a
combination of net income, continued amortization of deferred stock
compensation, additional paid-in capital generated from the Employee Stock
Ownership Plan and the Performance Equity Plan, and the exercise of 6,659 vested
stock options. These factors more than offset the impact of the depreciation in
the aggregate fair value of securities classified as available for sale. The
Company did not repurchase any of its common stock during the first quarter of
2003, and will not repurchase any of its common stock prior to the stockholder
vote on the proposed merger.
In reviewing the most recent quarter, C. Edward Holden, the Company's
Chief Executive Officer and President, commented: "We are pleased to report the
eighth consecutive quarter of increased earnings per share, and the achievement
of record levels of loans, assets, deposits, and tangible book value per share.
We intend to enter into the proposed merger with a strong positive momentum by
maintaining our focus on building relationships, assisting customers in
attaining their financial objectives, and providing responsive customer service.
We look forward to having access to the product line and expanded service
delivery options that will become available following the merger with Union Bank
of California, including a vastly increased ATM network and enhanced electronic
banking functionality."
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 headquarters building in
Watsonville that also functions as a limited service branch office, 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, remote
deposit services, and worldwide ATM networks. The Bank's deposits are insured by
the Federal Deposit Insurance Corporation ("FDIC") to the maximum extent allowed
by law.
Monterey Bay Bancorp, Inc. Page 9
Press Release
April 24, 2003
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", "plans", "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, the pending regulatory review of the
proposed merger with Union Bank of California, the planned special meeting of
stockholders to vote on the proposed merger with Union Bank of California,
performance and contributions of employees and Directors, the Company's ability
to retain high caliber bankers, expected loan payments, loan originations, and
future collateral values, 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,
2002 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.
This news release is available at the www.montereybaybank.com Internet
site for no charge and is included as an Exhibit to a Form 8-K filed with the
Securities and 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 ---
MONTEREY BAY BANCORP, INC.
(NASDAQ: MBBC)
Consolidated Financial Highlights
Unaudited
(Dollars In Thousands)
March 31, December 31,
Financial Condition Data 2003 2002
- -------------------------------------------------------------- --------- ------------
Cash and cash equivalents $ 9,828 $ 11,447
Investment securities available for sale 7,070 7,030
Mortgage backed securities available for sale 40,278 37,466
Loans held for sale 475 1,545
Loans receivable held for investment:
Residential one to four unit real estate loans 175,942 187,471
Multifamily five or more units real estate loans 138,613 118,004
Commercial and industrial real estate loans 132,197 140,027
Construction loans 81,684 69,526
Land loans 23,598 24,801
Commercial business loans 18,919 18,008
Other loans 9,129 9,216
-------- --------
Sub-total gross loans held for investment 580,082 567,053
(Less) / Plus:
Undisbursed construction loan funds (32,959) (36,683)
Unamortized purchase premiums, net of purchase discounts 1,142 848
Deferred loan fees and costs, net (1,113) (1,127)
Allowance for loan losses (8,436) (8,162)
-------- --------
Loans receivable held for investment, net 538,716 521,929
Investment in capital stock of the Federal Home Loan Bank ("FHLB") 4,726 4,679
Accrued interest receivable 3,095 2,867
Premises and equipment, net 7,004 7,161
Core deposit intangibles, net 663 833
Bank owned life insurance 9,149 9,036
Real estate acquired via foreclosure, net -- 846
Other assets 4,799 4,857
-------- --------
Total assets $625,803 $609,696
======== ========
Non-interest bearing demand deposits $ 27,116 $ 23,549
Interest bearing NOW checking accounts 41,551 43,629
Savings accounts 18,539 18,474
Money market accounts 143,249 126,061
Certificates of deposit 247,290 246,621
-------- --------
Total deposits 477,745 458,334
FHLB advances and other borrowings 88,417 93,805
Other liabilities 1,399 1,454
-------- --------
Total liabilities 567,561 553,593
-------- --------
Stockholders' equity 58,242 56,103
-------- --------
Total liabilities and stockholders' equity $625,803 $609,696
======== ========
10
MONTEREY BAY BANCORP, INC.
(NASDAQ: MBBC)
Consolidated Financial Highlights, Continued
Unaudited
(Dollars In Thousands Except Per Share Amounts)
Three Months Ended
March 31,
-----------------------------
Operating Data 2003 2002
- ---------------------------------------------------------- ---- ----
Interest income $ 8,980 $ 8,755
Interest expense 2,808 3,405
---------- ----------
Net interest income before provision for loan losses 6,172 5,350
Provision for loan losses 325 325
---------- ----------
Net interest income after provision for loan losses 5,847 5,025
---------- ----------
Non-interest income:
Customer service charges 394 351
Gain on sale of loans held for sale 123 27
Gain on sale of real estate acquired via foreclosure 114 --
Income from bank owned life insurance 113 --
Commissions from sales of non-insured products 28 41
Income from loan servicing 12 14
Gain on sale of mortgage backed securities 1 43
Other income 50 36
---------- ----------
Total non-interest income 835 512
---------- ----------
Non-interest expense:
Compensation and employee benefits 2,217 1,905
Occupancy and equipment 390 424
Supplies, postage, telephone, & office expenses 171 168
Amortization of intangible assets 170 170
Data and item processing 157 136
Legal and accounting 126 119
Advertising and promotion 37 81
Deposit insurance premiums 19 51
Other 333 412
---------- ----------
Total non-interest expense 3,620 3,466
---------- ----------
Income before provision for income taxes 3,062 2,071
Provision for income taxes 1,225 866
---------- ----------
Net income $ 1,837 $ 1,205
========== ==========
Shares applicable to basic earnings per share 3,380,948 3,348,387
Basic earnings per share $ 0.54 $ 0.36
========== ==========
Shares applicable to diluted earnings per share 3,524,056 3,465,286
Diluted earnings per share $ 0.52 $ 0.35
========== ==========
11
MONTEREY BAY BANCORP, INC.
(NASDAQ: MBBC)
Selected Ratios And Other Data
Unaudited
(Dollars In Thousands Except Per Share Amounts)
Three Months Ended March 31,
----------------------------
2003 2002
---- ----
Profitability Ratios [1]
- ------------------------------------------
Return on average assets 1.20% 0.90%
Return on average equity 12.73% 9.37%
Interest rate spread during the period 4.10% 3.92%
Net interest income / average total assets 4.02% 3.98%
Net interest margin 4.27% 4.19%
Efficiency ratio 51.67% 59.13%
Other Information
- ------------------------------------------
Average total assets $ 614,321 $ 537,373
Average interest earning assets $ 578,115 $ 510,421
March 31, December 31,
2003 2002
---- ----
Asset Quality Information
- ------------------------------------------
Non-accrual loans $ 2,578 $ 2,643
Non-performing loans $ 2,920 $ 2,643
Real estate acquired via foreclosure, net $ -- $ 846
Allowance for loan losses $ 8,436 $ 8,162
Non-performing loans /
total assets 0.47% 0.43%
Allowance for loan losses /
loans outstanding 1.54% 1.54%
Allowance for loan losses /
non-accrual loans 327.23% 308.82%
Bank Regulatory Capital Ratios
- ------------------------------------------
Tangible capital ratio 8.71% 8.57%
Core capital ratio 8.71% 8.57%
Tier one risk based capital ratio 11.75% 11.63%
Total risk based capital ratio 13.00% 12.88%
Other Information
- ------------------------------------------
Full-service customer facilities 8 8
Limited service customer facilities 1 1
Stand alone loan production offices 1 1
Number of ATM's 11 11
Loan to deposit ratio 112.86% 114.21%
Tangible book value per share $16.64 $16.00
Shares outstanding 3,460,974 3,454,315
Stock price at end of period $19.52 $19.95
- ------------------------------------------
[1] All applicable ratios reflect annualized figures.
12