-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RUSvwK8brCyVGl3EDpRDmAMUCXSss5xDez16mRO4zq9SOtpCshr89h69GK62LFSs nlBx9wkIfYjQAuLQmwkCHw== 0000891618-98-002463.txt : 19980518 0000891618-98-002463.hdr.sgml : 19980518 ACCESSION NUMBER: 0000891618-98-002463 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL COAST BANCORP CENTRAL INDEX KEY: 0000921085 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 770367061 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25418 FILM NUMBER: 98624100 BUSINESS ADDRESS: STREET 1: 301 MAIN ST CITY: SALINAS STATE: CA ZIP: 93901 BUSINESS PHONE: 4084226642 MAIL ADDRESS: STREET 1: P O BOX 450 CITY: SALINAS STATE: CA ZIP: 93902 FORMER COMPANY: FORMER CONFORMED NAME: SALINAS VALLEY BANCORP DATE OF NAME CHANGE: 19940330 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1998. ------------------------ [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ________________ to ________________ Commission File No. 0-25418 . CENTRAL COAST BANCORP - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 77-0367061 ------------------------------- ------------------------ (State or other jurisdiction of (IRS Employer ID Number) incorporation or organization) 301 Main Street, Salinas, California 93901 ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) (408) 422-6642 ------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: No par value Common Stock - 4,808,945 shares outstanding at April 6, 1998. ----------------- Page 1 of 27 The Index to the Exhibits is located at Page 24 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements: CENTRAL COAST BANCORP AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unauditied)
- ------------------------------------------------------------------------------------------------------------- March 31, 1998 December 31, 1997 - ------------------------------------------------------------------------------------------------------------- ASSETS Cash and due from banks $ 43,024,000 $ 39,891,000 Federal funds sold 52,793,000 64,706,000 - ------------------------------------------------------------------------------------------------------------- Total cash and equivalents 95,817,000 104,597,000 Securities: Available-for-sale 104,614,000 91,481,000 Held-to-maturity 26,284,000 39,048,000 (Market value: $26,367,000 at March 31, 1998 and $39,105,000 at December 31, 1997) Loans held for sale 2,208,000 1,331,000 Loans: Commercial 110,991,000 124,714,000 Real estate-construction 18,917,000 14,645,000 Real estate-other 113,037,000 107,354,000 Installment 8,022,000 9,349,000 - ------------------------------------------------------------------------------------------------------------- Total loans 250,967,000 256,062,000 Allowance for credit losses (4,201,000) (4,223,000) Deferred loan fees, net (518,000) (568,000) - ------------------------------------------------------------------------------------------------------------- Net Loans 246,248,000 251,271,000 - ------------------------------------------------------------------------------------------------------------- Premises and equipment, net 2,129,000 2,001,000 Accrued interest receivable and other assets 7,894,000 7,945,000 - ------------------------------------------------------------------------------------------------------------- Total assets $ 485,194,000 $ 497,674,000 ============================================================================================================= LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand, noninterest bearing $ 104,254,000 $ 126,818,000 Demand, interest bearing 82,591,000 89,107,000 Savings 95,878,000 99,748,000 Time 153,594,000 134,628,000 - ------------------------------------------------------------------------------------------------------------- Total Deposits 436,317,000 450,301,000 Accrued interest payable and other liabilities 3,728,000 3,649,000 - ------------------------------------------------------------------------------------------------------------- Total liabilities 440,045,000 453,950,000 - ------------------------------------------------------------------------------------------------------------- COMMITMENTS AND CONTINGENCIES (NOTE 4) SHAREHOLDERS' EQUITY: Preferred stock - no par value; authorized 1,000,000 shares; no shares issued Common stock - no par value; authorized 30,000,000 shares; issued and outstanding: 4,808,945 shares at March 31, 1998 and 4,368,469 shares at December 31, 1997 41,070,000 31,644,000 Retained earnings 4,093,000 11,979,000 Accumulated other comprehensive income - Net unrealized gain (loss) on available-for-sale securities, net of tax (14,000) 101,000 - ------------------------------------------------------------------------------------------------------------- Shareholders' equity 45,149,000 43,724,000 - ------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 485,194,000 $ 497,674,000 =============================================================================================================
See notes to Consolidated Condensed Financial Statements 2 3 CENTRAL COAST BANCORP AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
- ---------------------------------------------------------------------------------------------------- Three Months Ended March 31, 1998 1997 - ---------------------------------------------------------------------------------------------------- INTEREST INCOME Loans (including fees) $6,267,000 $5,932,000 Investment securities 1,780,000 1,110,000 Other 945,000 590,000 - ---------------------------------------------------------------------------------------------------- Total interest income 8,992,000 7,632,000 - ---------------------------------------------------------------------------------------------------- INTEREST EXPENSE Interest on deposits 3,334,000 2,610,000 Other 1,000 2,000 - ---------------------------------------------------------------------------------------------------- Total interest expense 3,335,000 2,612,000 - ---------------------------------------------------------------------------------------------------- NET INTEREST INCOME 5,657,000 5,020,000 PROVISION FOR CREDIT LOSSES 17,000 -- - ---------------------------------------------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 5,640,000 5,020,000 - ---------------------------------------------------------------------------------------------------- OTHER INCOME 394,000 386,000 - ---------------------------------------------------------------------------------------------------- OTHER EXPENSES Salaries and benefits 2,155,000 1,833,000 Occupancy 219,000 204,000 Furniture and equipment 195,000 178,000 Other 883,000 734,000 - ---------------------------------------------------------------------------------------------------- Total other expenses 3,452,000 2,949,000 - ---------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 2,582,000 2,457,000 PROVISION FOR INCOME TAXES 1,068,000 1,006,000 ==================================================================================================== NET INCOME $1,514,000 $1,451,000 ==================================================================================================== BASIC EARNINGS PER SHARE $ 0.31 $ 0.31 DILUTED EARNINGS PER SHARE $ 0.29 $ 0.29 ====================================================================================================
See Notes to Consolidated Condensed Financial Statements 3 4 CENTRAL COAST BANCORP AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
- ---------------------------------------------------------------------------------------------------- Three months ended March 31, 1998 1997 - ---------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATIONS: Net income $ 1,514,000 $ 1,451,000 Reconciliation of net income to net cash provided by operating activities: Provision for credit losses 17,000 -- Net gain on sale of fixed assets (1,000) (11,000) Depreciation 139,000 115,000 Amortization and accretion (100,000) (15,000) (Increase) decrease in accrued interest receivable and other assets 53,000 (524,000) Increase in accrued interest payable and other liabilities 367,000 3,040,000 Decrease in deferred loan fees (50,000) (34,000) - ---------------------------------------------------------------------------------------------------- Net cash provided by operations 1,939,000 4,022,000 - ---------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Net decrease in interest-bearing deposits in financial institutions -- 600,000 Purchases of investment securities (62,166,000) (32,350,000) Proceeds from maturities of investment securities 61,780,000 3,566,000 Net change in loans held for sale (877,000) (165,000) Net decrease in loans 5,056,000 2,660,000 Proceeds from sale of other real estate owned -- 133,000 Proceeds from sale of fixed assets 1,000 11,000 Capital expenditures (267,000) (884,000) - ---------------------------------------------------------------------------------------------------- Net cash provided (used) in investing activities 3,527,000 (26,429,000) - ---------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in deposit accounts (13,984,000) 46,193,000 Net increase (decrease) in short-term borrowings (288,000) 2,800,000 Proceeds from sale of stock 39,000 60,000 Fractional shares repurchased (13,000) (8,000) - ---------------------------------------------------------------------------------------------------- Net cash provided(used) by financing activities (14,246,000) 49,045,000 - ---------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and equivalents (8,780,000) 26,638,000 Cash and equivalents, beginning of period 104,597,000 60,657,000 - ---------------------------------------------------------------------------------------------------- Cash and equivalents, end of period $ 95,817,000 $ 87,295,000 ==================================================================================================== OTHER CASH FLOW INFORMATION: Interest paid $ 3,346,000 $ 2,213,000 Income taxes paid -- -- ====================================================================================================
See Notes to Consolidated Condensed Financial Statements 4 5 CENTRAL COAST BANCORP AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS March 31, 1998 (Unaudited) 1. CONSOLIDATED FINANCIAL STATEMENTS In the opinion of Management, the unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's consolidated financial position at March 31, 1998 and December 31, 1997, the results of operations for the three month periods ended March 31, 1998 and 1997, and cash flows for the three month periods ended March 31, 1998 and 1997. Certain information and footnote disclosures normally presented in financial statements prepared in accordance with generally accepted accounting principles have been omitted. These interim consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 1997 Annual Report to Shareholders. The results of operations for the three month periods ended March 31, 1998 and 1997 may not necessarily be indicative of the operating results for the full year. In preparing such financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for credit losses and the carrying value of other real estate owned. Management uses information provided by an independent loan review service in connection with the determination of the allowance for loan losses. 2. INVESTMENT SECURITIES The Company is required under Financial Accounting Standards Board (FASB) Statement No. 115, "Accounting for Investments in Certain Debt and Equity Securities", to classify debt and equity securities into one of three categories: held-to-maturity, trading or available-for-sale. Investment securities classified as held-to-maturity are measured at amortized cost based on the Company's positive intent and ability to hold such securities to maturity. Trading securities are bought and held principally for the purpose of selling them in the near term and are carried at market value with a corresponding recognition of unrecognized holding gain or loss in the results of operations. The remaining investment securities are classified as available-for-sale and are measured at market value with a corresponding recognition of the unrealized holding gain or loss (net of tax effect) as a separate component of shareholders' equity until realized. Any gains and losses on sales of investments are computed on a specific identification basis. 5 6 The carrying value and approximate market value of securities at March 31, 1998 and December 31, 1997 are as follows:
- ------------------------------------------------------------------------------------------------------ Amortized Unrealized Unrealized Market In thousands Cost Gain Losses Value - ------------------------------------------------------------------------------------------------------ MARCH 31, 1998 AVAILABLE FOR SALE SECURITIES: U.S. Treasury and agency services Maturing within 1 year $ 6,991 $ 19 $ -- $ 7,010 Maturing after 1 year but within 5 years 82,587 195 116 82,666 Maturing after 10 years 15,056 -- 122 14,934 Other 4 -- -- 4 - ------------------------------------------------------------------------------------------------------ Total available for sale $104,638 $214 $238 $104,614 - ------------------------------------------------------------------------------------------------------ HELD TO MATURITY SECURITIES: U.S. Treasury and agency services Maturing within 1 year $ 16,997 $ 12 $ 3 $ 17,006 Maturing after 1 year but within 5 years 6,400 57 -- 6,457 Maturing after 5 years but within 10 years 41 2 -- 43 Maturing after 10 years 795 15 -- 810 State & Political Subdivision Maturing after 5 years but within 10 years 2,051 -- -- 2,051 - ------------------------------------------------------------------------------------------------------ Total held to maturity $ 26,284 $ 86 $ 3 $ 26,367 - ------------------------------------------------------------------------------------------------------ Total investment securities $130,922 $300 $241 $130,981 ====================================================================================================== DECEMBER 31, 1997 AVAILABLE FOR SALE SECURITIES: U.S. Treasury and agency services Maturing within 1 year $ 32,861 $ -- $ 5 $ 32,856 Maturing after 1 year but within 5 years 48,410 184 7 48,587 Bankers' Acceptances Maturing within 1 year 10,034 -- -- 10,034 Other 4 -- -- 4 - ------------------------------------------------------------------------------------------------------ Total available for sale $ 91,309 $184 $ 12 $ 91,481 - ------------------------------------------------------------------------------------------------------ HELD TO MATURITY SECURITIES: U.S. Treasury and agency services Maturing within 1 year $ 27,484 $ 7 $ 11 $ 27,480 Maturing after 1 year but within 5 years 8,495 66 2 8,559 Maturing after 5 years but within 10 years 20 -- -- 20 Maturing after 10 years 857 6 9 854 State & Political Subdivision Maturing after 5 years but within 10 years 2,192 -- -- 2,192 - ------------------------------------------------------------------------------------------------------ Total held to maturity $ 39,048 $ 79 $ 22 $ 39,105 - ----------------------------------------------------------------------------------------------------- Total investment securities $130,357 $263 $ 34 $130,586 ======================================================================================================
6 7 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES The activity in the allowance for credit losses is summarized as follows:
- ------------------------------------------------------------------------------- Three months ended March 31, In thousands 1998 1997 - ------------------------------------------------------------------------------- Beginning balance $4,223 $4,372 Provision charged to expense 17 -- Loans charged off (69) (88) Recoveries 30 29 - ------------------------------------------------------------------------------- Ending balance $4,201 $4,313 ===============================================================================
The allowance for credit losses reflects management's judgement as to the level considered adequate to absorb potential losses inherent in the loan portfolio. The allowance is increased by provisions charged to expense and reduced by loan charge-offs net of recoveries. Management determines an appropriate provision based upon information currently available to analyze credit loss potential, including (1) the loan portfolio balance in the period; (2) a comprehensive grading and review of new and existing loans outstanding; (3) actual previous charge-offs; and, (4) changes in economic conditions. In determining the provision for estimated losses related to specific major loans, management evaluates its allowance on an individual loan basis, including an analysis of the credit worthiness, cash flows and financial status of the borrower, and the condition and the estimated value of the collateral. Specific valuation allowance for secured loans are determined by the excess of recorded investment in the loan over the fair market value or net realizable value where appropriate, of the collateral. In determining overall general valuation allowances to be maintained and the loan loss allowance ratio, management evaluates many factors including prevailing and forecasted economic conditions, regular reviews of the quality of loans, industry experience, historical loss experience, composition and geographic concentrations of the loan portfolio, the borrowers' ability to repay and repayment performance and estimated collateral values. Management believes that the allowance for credit losses at March 31, 1998 is prudent and warranted, based on information currently available. However, no prediction of the ultimate level of loans charged off in future years can be made with any certainty. Nonperforming assets are comprised of loans delinquent 90 days or more with respect to interest or principal, loans for which the accrual of interest has been discontinued, and other real estate which has been acquired through foreclosure and is awaiting disposition. Unless well secured and in the process of collection, loans are placed on nonaccrual status when a loan becomes 90 days past due as to interest or principal, when the payment of interest or principal in accordance with the contractual terms of the loan becomes uncertain or when a portion of the principal balance has been charged off. When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is reversed and the loan is 7 8 accounted for on the cash or cost recovery method thereafter, until qualifying for return to accrual status. Generally, a loan may be returned to accrual status when all delinquent interest and principal become current in accordance with the terms of the loan agreement and remaining principal is considered collectible or when the loan is both well secured and in process of collection. Real estate and other assets acquired in satisfaction of indebtedness are recorded at the lower of estimated fair market value net of anticipated selling costs or the recorded loan amount, and any difference between this and the amount is treated as a loan loss. Costs of maintaining other real estate owned and gains or losses on the subsequent sale are reflected in current earnings. Nonperforming loans and other real estate owned (foreclosed properties) are summarized below:
- ------------------------------------------------------------------------------- March 31, December 31, In thousands 1998 1997 - ------------------------------------------------------------------------------- Past due 90 days or more and still accruing Real estate $ 5 $ 6 Commercial 173 73 Installment and other -- -- - ------------------------------------------------------------------------------- 178 79 - ------------------------------------------------------------------------------- Nonaccrual: Real estate 548 628 Commercial 94 188 Installment and other 10 -- - ------------------------------------------------------------------------------- 652 816 - ------------------------------------------------------------------------------- Total nonperforming loans $830 $895 =============================================================================== Other real estate owned $105 $105 ===============================================================================
4. COMMITMENTS AND CONTINGENCIES In the normal course of business there are outstanding various commitments to extend credit which are not reflected in the financial statements, including loan commitments of approximately $96,749,000 and standby letters of credit of $5,176,000 at March 31, 1998. However, all such commitments will not necessarily culminate in actual extensions of credit by the Company during 1998. Approximately $19,398,000 of loan commitments outstanding at March 31, 1998 relate to real estate construction loans and are expected to fund within the next twelve months. The remainder relate primarily to revolving lines of credit or other commercial loans, and many of these commitments are expected to expire without being drawn upon. Therefore, the total commitments do not necessarily represent future cash requirements. The Banks evaluate each potential borrower and the necessary collateral on an individual basis. Collateral varies, but may include real property, bank deposits, debt or equity securities or business assets. 8 9 Stand-by letters of credit are commitments written by the Banks to guarantee the performance of a customer to a third party. These guarantees are issued primarily relating to purchases of inventory by the Banks' commercial customers and are typically short-term in nature. Credit risk is similar to that involved in extending loan commitments to customers and accordingly, the Banks use evaluation and collateral requirements similar to those for loan commitments. Virtually all such commitments are collateralized. 5. EARNINGS PER SHARE COMPUTATION Basic earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period (4,806,000 and 4,718,000 for the three month periods ended March 31, 1998 and 1997, respectively). Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options and stock purchase warrants were exercised. Diluted earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period plus the dilutive effect of options and warrants (427,000 and 331,000 for the three month periods ended March 31, 1998 and 1997, respectively). 6. RECENTLY ISSUED ACCOUNTING STANDARD Effective January 1, 1998, Central Coast Bancorp adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income". This Statement requires that all items recognized under accounting standards as components of comprehensive earnings be reported in an annual financial statement that is displayed with the same prominence as other annual financial statements. This Statement also requires that an entity classify items of other comprehensive earnings by their nature in an annual financial statement. For example, other comprehensive earnings may include foreign currency translation adjustments, minimum pension liability adjustments, and unrealized gains and losses on marketable secuirties classified as available-for-sale. Annual financial statements for prior periods will be reclassified, as required. Central Coast Bancorp's total comprehensive earnings were as follows:
- ---------------------------------------------------------------------------------------- Three Months Ended March 31, In thousands 1998 1997 - ---------------------------------------------------------------------------------------- Net Earnings $1,514 $1,451 Other comprehensive loss - Net unrealized loss on available-for-sale securities (115) (52) - ---------------------------------------------------------------------------------------- Total comprehensive earnings $1,399 $1,399 ========================================================================================
9 10 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain matters discussed or incorporated by reference in this Quarterly Report on Form 10-Q are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, matters described in Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations." Therefore, the information set forth therein should be carefully considered when evaluating the business prospects of the Company and the Banks. Business Organization Central Coast Bancorp (the "Company") is a California corporation organized in 1994, and is the parent company for Bank of Salinas and Cypress Bank (the "Banks"), state-chartered banks, headquartered in Salinas and Seaside, California, respectively. Other than its investment in the Banks, the Company currently conducts no other significant business activities, although it is authorized to engage in a variety of activities which are deemed closely related to the business of banking upon prior approval of the Board of Governors of the Federal Reserve System (the "FRB"), the Company's principal regulator. The Banks offer a full range of commercial banking services, offering a diverse range of traditional banking products and services to individuals, merchants, small and medium-sized businesses, professionals and agribusiness enterprises located in the Salinas Valley and Monterey Peninsula. Summary of Financial Results At March 31, 1998, total assets of Central Coast Bancorp were $485,194,000, a decrease of $12,480,000 or 2.5% from December 31, 1997 total assets of $497,674,000. Average total assets for the quarters ended March 31, 1998 and 1997 were $484,958,000 and $390,871,000, respectively. On February 21, 1997, the Bank of Salinas purchased certain assets and assumed certain liabilities of the Gonzales and Castroville offices of Wells Fargo Bank (including total deposit liabilities of approximately $34 million). As a result of the transaction the Bank assumed deposit liabilities, received cash and acquired tangible assets. In addition, the transaction resulted in intangible assets, representing the excess of the liabilities assumed over the fair value of the tangible assets acquired. Net loans at March 31, 1998 were $246,248,000 compared to $251,271,000 at December 31, 1997, a decrease of $5,023,000 or 2.0%. The decrease in loan balances is primarily the result of decreases in commercial loan categories partially offset by increases in term real 10 11 estate loan categories. Commercial loans decreased $13,723,000 or 11.0% to $110,991,000 at March 31, 1998 from $124,714,000 at December 31, 1997. The decrease in commercial loan balances is primarily due to seasonal fluctuation related to the agribusiness sector of the local economy. Partially offsetting this decrease, was an increase in term real estate, real estate construction and land development loans. Real estate mortgage loan balances of $113,037,000 at March 31, 1998 represented an increase of $5,683,000 or 5.3% over $107,354,000 at December 31, 1997. Real estate construction and land development loans of $18,917,000 at March 31, 1998 represented an increase of $4,272,000 or 29.2% from $14,645,000 at December 31, 1997. The Company designated securities with an estimated market value of $104,614,000 as available-for-sale at March 31, 1998. The amortized cost of securities designated as available-for-sale on that date was $104,638,000. The available-for-sale portfolio at March 31, 1998 consisted primarily of U.S. Treasury bills and notes and securities issued by U.S. government-sponsored agencies (FNMA, FHLMC and FHLB) with maturities within five years and U.S. government-sponsored agencies mortgage backed securities with maturities greater than ten years. During the three months ended March 31, 1998, the Company made securities purchases of $62,166,000 to replace $49,014,000 of maturities and to more fully employ excess liquidity. Securities designated as held-to-maturity at March 31, 1998 were carried at an amortized cost of $26,284,000. The estimated market value of the held-to-maturity portfolio at March 31, 1998 was $26,367,000. The held-to-maturity portfolio at March 31, 1998 consists primarily of U.S. Treasury bills and notes and securities issued by U.S. government-sponsored agencies with maturities within five years. Investment securities classified as held-to-maturity are measured at amortized cost based on the Company's intent and ability to hold such securities to maturity. During the three months ended March 31, 1998, $12,766,000 held-to-maturity securities matured and were not replaced. Other earning assets are comprised of Federal funds sold and time deposits at other financial institutions. Federal funds sold balances of $52,793,000 at March 31, 1998 represent a decrease of $11,913,000 over $64,706,000 at December 31, 1997. The decrease in federal funds sold primarily reflects investment of funds into higher yielding available-for-sale securities. The Company held no time deposits in other financial institutions at March 31, 1998 and at December 31, 1997. Total deposits were $436,317,000 at March 31, 1998 which represented a decrease of $13,984,000 or 3.1% over balances of $450,301,000 at December 31, 1997. The decrease in total deposits includes decreases in all deposit categories, except time deposits. Noninterest-bearing demand deposits were $104,254,000 at March 31, 1998 compared to $126,818,000 at December 31, 1997, a decrease of $22,564,000 or 17.8%. The decrease in noninterest bearing demand balances is partially due to seasonal fluctuation. Interest bearing demand balances decreased $6,516,000 or 7.3% to $82,591,000 at March 31, 1998 from $89,107,000 at December 31, 1997. Savings balances of $95,878,000 represent a decrease of $3,870,000 or 3.9% from $99,748,000 at December 31, 1997. Partially offsetting these 11 12 decreases, time deposits increased $18,966,000 or 14.1% to $153,594,000 at March 31, 1998 from $134,628,000 at December 31, 1997. 12 13 THREE MONTHS ENDED MARCH 31, 1998 AND 1997 Net income for the three months ended March 31, 1998 was $1,514,000 compared to $1,451,000 ($.31 basic and $.29 diluted earnings per share) for the comparable period in 1997. The following discussion highlights changes in certain items in the consolidated condensed statements of income. Net interest income Net interest income, the difference between interest earned on loans and investments and interest paid on deposits and other borrowings, is the principal component of the Banks' earnings. The components of net interest income are as follows:
(Unaudited) Three months ended March 31, In thousands (except percentages) 1998 1997 - -------------------------------------------------------------------------------------------- Avg Avg Avg Avg Balance Interest Yield Balance Interest Yield - -------------------------------------------------------------------------------------------- ASSETS: Earning Assets Loans(1)(2) $245,425 $6,267 10.4% $231,523 $5,932 10.4% Investment Securities 121,504 1,780 5.9% 78,696 1,110 5.7% Other 70,211 945 5.5% 45,667 590 5.2% -------- ------ -------- ------ Total Earning Assets 437,140 8,992 8.3% 355,886 7,632 8.7% ------ ------ Cash and due from banks 37,718 26,983 Other assets 10,100 8,002 -------- -------- $484,958 $390,871 ======== ======== LIABILITES & SHAREHOLDERS' EQUITY: Interest bearing liabilities: Demand deposits $ 86,596 $ 422 2.0% $ 86,789 $ 437 2.0% Savings 99,572 942 3.8% 92,579 926 4.1% Time deposits 142,025 1,970 5.6% 92,332 1,247 5.5% Other borrowings 61 1 6.6% 923 2 0.9% -------- ------ -------- ------ Total interest bearing liabilities 328,254 3,335 4.1% 272,623 2,612 3.9% ------ ------ Demand deposits 108,580 80,170 Other Liabilities 3,308 1,464 -------- -------- Total Liabilities 440,142 354,257 Shareholders' Equity 44,816 36,614 -------- -------- $484,958 $390,871 ======== ======== Net interest income and margin (net yield)(3) $5,657 5.2% $5,020 5.7% ====== ==== ====== ====
- ---------------------------------------- (1) Loan interest income includes fee income of $244,000 and $276,000 for the three month periods ended March 31, 1998 and 1997, respectively. (2) Includes the average allowance for loan losses of $4,207,000 and $4,354,000 and average deferred loan fees of $548,000 and $649,000 for the three months ended March 31, 1998 and 1997, respectively. (3) Net interest margin is computed by dividing net interest income by the total average earning assets. 13 14 Net interest income for the three months ended March 31, 1998 was $5,657,000 representing an improvement of $637,000 or 12.7% over $5,020,000 for the comparable period in 1997. The increase in net interest income is comprised of an increase of $1,360,000 or 17.8% in interest income partially offset by an increase in interest expense of $723,000 or 27.7%. As a percentage of average earning assets, the net interest margin for the first quarter of 1998 was 5.2% and compares to 5.7% in the same period one year earlier. On average, the loan to deposit ratio of the Company decreased to 56.2% in the first quarter of 1998 from 65.8% in the same period last year. Interest income recognized in the three months ended March 31, 1998 was $8,992,000 representing an increase of $1,360,000 or 17.8% over $7,632,000 for the same period of 1997. The increase in interest income was primarily due to an increase in the volume of average earning assets. Earning assets averaged $437,140,000 in the three months ended March 31, 1998 compared to $355,886,000 in the same period in 1997, representing an increase of $81,254,000 or 22.8%. The increase in average earning assets included an increase in average loans of $13,902,000 or 6% and increases in investment securities and fed funds sold of $42,808,000 and $24,544,000 or 54.4% and 53.7%, respectively. The average yield on interest earning assets decreased to 8.3% in the three months ended March 31, 1998 compared to 8.7% for the same period of 1997. The decrease in average yield is attributed to a decrease in the proportion of loans to total earning assets to 56.1% in the first quarter of 1998 from 65.1% in the same period in 1997. Loan fees recognized during the quarter ended March 31, 1998 were $244,000 compared to $276,000 one year earlier. Partially offsetting the increase in interest income was an increase in the cost of liabilities funding the growth in average earning assets. Interest expense for the three months ended March 31, 1998 was $3,335,000 and represented an increase of $723,000 or 27.7% over $2,612,000 for the comparable period in 1997. During the three months ended March 31, 1998, the average rate paid by the Banks on interest-bearing liabilities was 4.1% compared to 3.9% for the same period in 1997. The increase in interest expense for the first quarter of 1998 reflects an increase in the proportion of time deposits to total interest bearing liabilities to 43.3% in the first quarter of 1998 from 33.9% in the same period in 1997. Average interest bearing liabilities were $328,254,000 in the three months ended March 31, 1998 compared to $272,623,000 for the same period in 1997, an increase of $55,631,000 or 20.4%. Partially offsetting the impact on net interest income resulting from the increase in interest bearing liabilities was an increase in average noninterest bearing demand deposits. Average noninterest bearing demand deposits of $108,580,000 for the quarter ended March 31, 1998 represented an increase of $28,410,000 or 35.4% over $80,170,000 for the same period one year earlier. Credit Risk and Provision for Credit Losses The Company assesses and manages credit risk on an ongoing basis through stringent credit review and approval policies, extensive internal monitoring and established formal lending policies. Additionally, the Company contracts with an outside loan review consultant to periodically grade new loans and to review the existing loan portfolio. Management believes 14 15 its ability to identify and assess risk and return characteristics of the Company's loan portfolio is critical for profitability and growth. Management strives to continue the historically low level of credit losses by continuing its emphasis on credit quality in the loan approval process, active credit administration and regular monitoring. With this in mind, management has designed and implemented a comprehensive loan review and grading system that functions to continually assess the credit risk inherent in the loan portfolio. Ultimately, credit quality may be influenced by underlying trends in the economic and business cycles. The Company's business is concentrated in Monterey County, California whose economy is highly dependent on the agricultural industry. As a result, the Company lends money to individuals and companies dependent upon the agricultural industry. In addition, the Company has significant extensions of credit and commitments to extend credit which are secured by real estate, totaling approximately $159,685,000. The ultimate recovery of these loans is generally dependent on the successful operation, sale or refinancing of the real estate. The Company monitors the effects of current and expected market conditions and other factors on the collectibility of real estate loans. When, in management's judgement, these loans are impaired, appropriate provision for losses is recorded. The more significant assumptions management considers involve estimates of the following: lease, absorption and sale rates; real estate values and rates of return; operating expenses; inflation; and sufficiency of collateral independent of the real estate including, in limited instances, personal guarantees. In extending credit and commitments to borrowers, the Company generally requires collateral and/or guarantees as security. The repayment of such loans is expected to come from cash flow or from proceeds from the sale of selected assets of the borrowers. The Company's requirement for collateral and/or guarantees is determined on a case-by-case basis in connection with management's evaluation of the credit worthiness of the borrower. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, income-producing properties, residences and other real property. The Company secures its collateral by perfecting its interest in business assets, obtaining deeds of trust, or outright possession among other means. Credit losses from lending transactions related to real estate and agriculture compare favorably with the Company's credit losses on its loan portfolio as a whole. The Company recorded a $17,000 provision for loan losses through a charge to earnings in the quarter ended March 31, 1998 and no provision was recorded during that period in 1997. The small increase in the provision reflects the strengthening economy, continued strong credit performance and an increase in the rate of recovery of loan balances previously charged off. Loan balances of $69,000, which were previously identified and fully reserved for, were charged-off in the first quarter of 1998 compared to $88,000 charged-off in the same period one year earlier. Recoveries of loan balances previously charged-off were $30,000 for the quarter ended March 31, 1998 compared to $29,000 for the same period in 1997. See Note 3 of the consolidated condensed financial statements for further discussion of nonperforming loans and the allowance for credit losses. At March 31, 1998 the allowance for credit losses was $4,201,000 or 1.67% of total loans, compared to $4,223,000 or 1.65% at December 31, 1997. 15 16 Management believes that the allowance for loan losses is maintained at an adequate level for known and anticipated future risks inherent in the loan portfolio. However, the Company's loan portfolio, particularly the real estate related segments, may be adversely affected if California's economic conditions and the Monterey County real estate market were to weaken. As a result, the level of nonperforming loans, the provision for loan losses and the level of the allowance for loan losses may increase. Noninterest Income and Expense Noninterest income consists primarily of service charges on deposit accounts and fees for miscellaneous services. Total other income was $394,000 for the three months ended March 31, 1998 as compared to $386,000 for the same period of 1997. Noninterest income for the first quarter of 1998 represented an increase of 2.1% over the first quarter of 1997. The increase in noninterest income is primarily attributed to an increase in service charges on deposit accounts of $70,000 offsetting nonrecurring revenues in the prior year. Noninterest expense increased $503,000 or 17.1% to $3,452,000 in the quarter ended March 31, 1998 from $2,949,000 in the same period one year earlier. The increase in noninterest expenses is primarily due to increases in salaries and benefits, occupancy and equipment and supplies expense. As a percentage of average earning assets, other expenses, on an annualized basis, decreased to 3.2% in the three months ended March 31, 1998 from 3.3% in the comparable period of 1997. Salary and benefits expense was $2,155,000 in the three months ended March 31, 1998 compared to $1,833,000 in the same period one year earlier, an increase of $322,000 or 17.6%. The increase in salary and benefits expense is primarily due to increased headcount related to the branch acquisition by Bank of Salinas during the first quarter of 1997. Occupancy expense for the quarter ended March 31, 1998 was $219,000 and represented an increase of $15,000 or 7.4% over $204,000 for the same period last year. The increase in occupancy expense relates to the branch acquisition by Bank of Salinas during the first quarter of 1997. Furniture and equipment expense for the first quarter of 1998 increased $17,000 or 9.6% to $195,000 from $178,000 for the same period last year. The increase in furniture and equipment expense is the result of a program for upgrading the Company's internal systems in addition to the impact of facilities expansion by the Banks. Other expenses increased $149,000 or 20.3% to $883,000 in the three months ended March 31, 1998 from $734,000 for the comparable period one year earlier. The increase in other expenses is comprised of increases in promotional expenses, customer expenses, operating expenses and amortization of intangibles. Partially offsetting these increases were decreases in loan expenses and stationery and supplies. 16 17 LIQUIDITY AND INTEREST RATE SENSITIVITY Liquidity Liquidity management refers to the Company's ability to provide funds on an ongoing basis to meet fluctuations in deposit levels as well as the credit needs and requirements of its clients. Both assets and liabilities contribute to the Company's liquidity position. Federal funds lines, short-term investments and securities, and loan repayments contribute to liquidity, along with deposit increases, while loan funding and deposit withdrawals decrease liquidity. The Banks assess the likelihood of projected funding requirements by reviewing historical funding patterns, current and forecasted economic conditions and individual client funding needs. Commitments to fund loans and outstanding standby letters of credit at March 31, 1998, were approximately $96,749,000 and $5,176,000, respectively. Such loans relate primarily to revolving lines of credit and other commercial loans, and to real estate construction loans. The Company's sources of liquidity consist of its deposits with other banks, overnight funds sold to correspondent banks, unpledged short-term, marketable investments and loans held for sale. On March 31, 1998, consolidated liquid assets totaled $143 million or 29.5% of total assets as compared to $164.2 million or 33.0% of total consolidated assets on December 31, 1997. In addition to liquid assets, the Banks maintain lines of credit with correspondent banks for up to $20,000,000 available on a short-term basis. Informal agreements are also in place with various other banks to purchase participations in loans, if necessary. The Company serves primarily a business and professional customer base and, as such, its deposit base is susceptible to economic fluctuations. Accordingly, management strives to maintain a balanced position of liquid assets to volatile and cyclical deposits. Liquidity is also affected by portfolio maturities and the effect of interest rate fluctuations on the marketability of both assets and liabilities. In addition, it has been the Company's policy to restrict average maturities in the investment portfolio to not more than three years. The short-term repricing characteristics of the loan and investment portfolios, and loan agreements which generally require monthly interest payments, provide the Banks with additional secondary sources of liquidity. Another key liquidity ratio is the ratio of gross loans to total deposits, which was 57.5% at March 31, 1998 and 56.9% at December 31, 1997. Interest rate sensitivity Interest rate sensitivity is a measure of the exposure to fluctuations in the Banks' future earnings caused by fluctuations in interest rates. Such fluctuations result from the mismatch in repricing characteristics of assets and liabilities at a specific point in time. This mismatch, or interest rate sensitivity gap, represents the potential mismatch in the change in the rate of accrual of interest revenue and interest expense from a change in market interest rates. Mismatches in interest rate repricing among assets and liabilities arise primarily from the interaction of various customer businesses (i.e., types of loans versus the types of deposits maintained) and from management's discretionary investment and funds gathering activities. The Company attempts to manage its exposure to interest rate sensitivity, but due to its size and direct competition from the major banks, it must offer products which are competitive in the market place, even if less than optimum with respect to its interest rate exposure. 17 18 The Company's natural position is asset-sensitive (based upon the significant amount of variable rate loans and the repricing characteristics of its deposit accounts). This natural position provides a hedge against rising interest rates, but has a detrimental effect during times of interest rate decreases. The following table sets forth the distribution of repricing opportunities, based on contractual terms, of the Banks' earning assets and interest-bearing liabilities at March 31, 1998, the interest rate sensitivity gap (i.e. interest rate sensitive assets less interest rate sensitive liabilities), the cumulative interest rate sensitivity gap, the interest rate sensitivity gap ratio (i.e. interest rate sensitive assets divided by interest rate sensitive liabilities) and the cumulative interest rate sensitivity gap ratio.
March 31, 1998 - ------------------------------------------------------------------------------------------------------ In thousands - ------------------------------------------------------------------------------------------------------ Over three Assets and Liabilities Next day months and Over one which Mature or and within within and within Over Reprice Immediately three months one year five years five years Total - ------------------------------------------------------------------------------------------------------ Interest earning assets: Federal funds sold $ 52,793 $ -- $ -- $ -- $ -- $ 52,793 Investment securities -- 7,996 16,010 89,067 17,825 130,898 Loans, excluding nonaccrual loans and overdrafts 10,564 170,838 8,908 55,200 5,651 251,161 - ------------------------------------------------------------------------------------------------------ Total $ 63,357 $178,834 $ 24,918 $144,267 $ 23,476 $434,852 ====================================================================================================== Interest bearing liabilities: Interest bearing demand $ 82,591 $ -- $ -- $ -- $ -- $ 82,591 Savings 95,878 -- -- -- -- 95,878 Time certificates 43 38,044 90,723 24,730 54 153,594 Other Borrowings -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------ Total $ 178,512 $ 38,044 $ 90,723 $ 24,730 $ 54 $332,063 ====================================================================================================== Interest rate sensitivity gap $(115,155) $140,790 $(65,805) $119,537 $ 23,422 Cumulative interest rate sensitivity gap $(115,155) $ 25,635 $(40,170) $ 79,367 $102,789 Ratios: Interest rate sensitivity gap 0.35 4.70 0.27 5.83 434.74 Cumulative interest rate sensitivity gap 0.35 1.12 0.87 1.24 1.31 - ------------------------------------------------------------------------------------------------------
It is management's objective to maintain stability in the net interest margin in times of fluctuating interest rates by maintaining an appropriate mix of interest sensitive assets and liabilities. The Banks strive to achieve this goal through the composition and maturities of the investment portfolio and by adjusting pricing of interest-bearing liabilities, however, as noted 18 19 above, the ability to manage interest rate exposure may be constrained by competitive pressures. CAPITAL RESOURCES The Company's total shareholders' equity was $45,149,000 at March 31, 1998 compared to $43,724,000 at December 31, 1997. The Company and the Banks are subject to regulations issued by the Board of Governors and the FDIC which require maintenance of a certain level of capital. These regulations impose two capital standards: a risk-based capital standard and a leverage capital standard. Under the Board of Governors' risk-based capital guidelines, assets reported on an institution's balance sheet and certain off-balance sheet items are assigned to risk categories, each of which has an assigned risk weight. Capital ratios are calculated by dividing the institution's qualifying capital by its period-end risk-weighted assets. The guidelines establish two categories of qualifying capital: Tier 1 capital (defined to include common shareholders' equity and noncumulative perpetual preferred stock) and Tier 2 capital defined to include limited life (and in the case of banks, cumulative) preferred stock, mandatory convertible securities, subordinated debt and a limited amount of reserves for loan and lease losses. Each institution is required to maintain a risk-based capital ratio (including Tier 1 and Tier 2 capital) of 8%, of which at least half must be Tier 1 capital. Under the Board of Governors' leverage capital standard an institution is required to maintain a minimum ratio of Tier 1 capital to the sum of its quarterly average total assets and quarterly average reserve for loan losses, less intangibles not included in Tier 1 capital. Period-end assets may be used in place of quarterly average total assets on a case-by-case basis. A minimum leverage ratio of 3% is required for institutions which have been determined to be in the highest of five categories used by regulators to rate financial institutions and which are not experiencing or anticipating significant growth. All other organizations are required to maintain leverage ratios of at least 100 to 200 basis points above the 3% minimum. The following table shows the Company's actual capital amounts and ratios at March 31, 1998 and December 31, 1997 as well as the minimum capital ratios for capital adequacy under the regulatory framework:
For Capital Actual Adequacy Purposes: --------------------- --------------------- Amount Ratio Amount Ratio - ---------------------------------------------------------------------------------------------------- AS OF MARCH 31, 1998 Total Capital (to Risk Weighted Assets): 47,079,000 15.9% 23,727,000 8.0% Tier 1 Capital (to Risk Weighted Assets): 43,629,000 14.7% 11,863,000 4.0% Tier 1 Capital (to Average Assets): 43,629,000 9.0% 19,397,000 4.0% AS OF DECEMBER 31, 1997: Total Capital (to Risk Weighted Assets): 45,782,000 15.2% 24,046,000 8.0% Tier 1 Capital (to Risk Weighted Assets): 41,968,000 14.0% 12,023,000 4.0% Tier 1 Capital (to Average Assets): 41,968,000 9.6% 17,570,000 4.0% - --------------------------------------------------------------------------------------------------
19 20 The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") substantially revised banking regulations and established a framework for determination of capital adequacy of financial institutions. Under the FDICIA, financial institutions are placed into one of five capital adequacy categories as follows: (1) "well capitalized" consisting of institutions with a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or greater and a leverage ratio of 5% or greater, and the institution is not subject to an order, written agreement, capital directive or prompt corrective action directive; (2) "adequately capitalized" consisting of institutions with a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4% or greater and a leverage ratio of 4% or greater, and the institution does not meet the definition of a "well capitalized" institution; (3) "undercapitalized" consisting of institutions with a total risk-based capital ratio less than 8%, a Tier 1 risk-based capital ratio of less than 4%, or a leverage ratio of less than 4%; (4) "significantly undercapitalized" consisting of institutions with a total risk-based capital ratio of less than 6%, a Tier 1 risk-based capital ratio of less than 3%, or a leverage ratio of less than 3%; and, (5) "critically undercapitalized" consisting of an institution with a ratio of tangible equity to total assets that is equal to or less than 2%. Financial institutions classified as undercapitalized or below are subject to various limitations including, among other matters, certain supervisory actions by bank regulatory authorities and restrictions related to (i) growth of assets, (ii) payment of interest on subordinated indebtedness, (iii) payment of dividends or other capital distributions, and (iv) payment of management fees to a parent holding company. The FDICIA requires the bank regulatory authorities to initiate corrective action regarding financial institutions which fail to meet minimum capital requirements. Such action may, among other matters, require that the financial institution augment capital and reduce total assets. Critically undercapitalized financial institutions may also be subject to appointment of a receiver or conservator unless the financial institution submits an adequate capitalization plan. INFLATION The impact of inflation on a financial institution differs significantly from that exerted on manufacturing, or other commercial concerns, primarily because its assets and liabilities are largely monetary. In general, inflation primarily affects the Company indirectly through its effect on market rates of interest, and thus the ability of the Banks to attract loan customers. Inflation affects the growth of total assets by increasing the level of loan demand, and potentially adversely affects the Company's capital adequacy because loan growth in inflationary periods can increase at rates higher than the rate that capital grows through retention of earnings which the Company may generate in the future. In addition to its effects on interest rates, inflation directly affects the Company by increasing the Company's operating expenses. 20 21 The effect of inflation was not material to the Company's results of operations during the periods covered by this report. OTHER MATTERS As the year 2000 approaches, a critical issue has emerged regarding how existing application software programs and operating systems can accommodate this date value. In brief, many existing application software products in the marketplace were designed to only accommodate a two digit date position which represents the year (e.g., "95""is stored on the system and represents the year 1995). As a result, the year 1999 (i.e., "99") could be the maximum date value these systems will be able to accurately process. This is not just a banking problem, as corporations around the world and in all industries are similarly impacted. Management is in the process of working with its software vendors to assure that the Company is prepared for the year 2000. Also, the Company has put procedures in place to inquire whether the system of key borrowers are year 2000 compliant. At present, the Company does not have an estimate of the total cost of evaluating and fixing any potential year 2000 problems. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The reader is referred to pages 28 to 29 of the Annual Report on Form 10-K for information on market risk. There have been no significant changes since December 31, 1997. 21 22 PART II - OTHER INFORMATION Item 1. Legal proceedings. None. Item 2. Changes in securities. None. Item 3. Defaults upon senior securities. None. Item 4. Submission of matters to a vote of security holders. None. Item 5. Other information. None. Item 6. Exhibits and reports on Form 8-K. (a) Exhibits (27.1) Financial Data Schedules (b) Reports on Form 8-K - On April 29, 1998 the registrant filed a Current Report on Form 8-K, reporting under Item 5 "Other Events" that Andrew Ausonio resigned his position as director effective April 16, 1998 22 23 SIGNATURES - -------------------------------------------------------------------------------- Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. May 11, 1998 CENTRAL COAST BANCORP By \s\ JAYME C. FIELDS ---------------------------------- Jayme C. Fields, Controller (Principal Financial and Accounting Officer) 23 24 EXHIBIT INDEX
Exhibit Number Description Page - ------ ----------- ---- 27.1 Financial Data Schedule 25
24 EX-27.1 2 FINANCIAL DATA SCHEDULE
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ITEM 7 - "FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" AND IS QUALIFIED IN ITS ENTIRELY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN THIS REPORT AND INCORPORATED HEREIN BY REFERENCE. 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 43,024 0 52,793 0 104,614 26,284 26,367 252,657 4,201 485,194 436,317 0 3,728 0 0 0 41,070 4,079 485,194 6,267 1,780 945 8,992 3,334 3,335 5,657 17 0 3,452 2,582 2,582 0 0 1,514 0.31 0.29 5.2 652 178 0 0 4,223 69 30 4,201 4,201 0 0
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